Inflation fell to 6.91% in August from 7.04% in July, driven mainly by falling prices of imported food items, said official data released yesterday.
But the fall of inflation has taken the analysts by no surprise as they were expecting inflation to stay stable under the current politically calm situation.
They also said floods in some districts are unlikely to hurt inflation as the crisis is short-lived and has already started to disappear.
However, the year-on-year average inflation rose to 7.24% from 7.19%.
The downward slide was recorded in the prices of food items and upswing was recorded in the prices of non-food items, according to the Bangladesh Bureau of Statistics (BBS) data.
Food inflation in July slipped to 7.67% from 7.94% in August while non-food inflation rose to 5.76% from 5.71%.
“Drop in global food prices and relatively stable prices in local items, pushing down inflation,” Planning Minister AHM Mustafa Kamal said.
He expected inflation might come down further in coming months if the global food prices continue to decline.
Kamal also believed the country experienced a brief spell of floods and therefore the supply chain was unlikely to be affected.
A planning ministry statement said prices of locally produced foods like vegetables, fish, flattened rice, meat, spices, milk and other essentials increased.
Prices of non-food items also increased, which include clothing, house rent, utensils, health service, transport, education materials and other services.
In rural areas, the overall inflation stood at 6.83%, dropping from 6.93%. In urban areas, it fell to 7.08% from 7.24%.
“Month-to-month basis inflation remained more or less stable, which is not a situation to be worried,” said Zaid Bakht, research director of Bangladesh Institute of Development Studies.
“This is neither a bad news nor a good news,” he said. Though, seasonal flood is a matter of concern but might not turn worse and if there is no bad news from the political front, inflation will decline in future, he said.
Bangladesh Bank, in its policy statement (July-December), said the FY15 inflation target announced in the Budget is 6%.
Reducing average inflation from its current level may prove challenging especially as aggregate demand is likely to pick up in first half of this fiscal.
In general, the twelve-month average inflation, by definition, only changes in an incremental manner, it said.
