Inflation eased for the second consecutive month in September due to falling commodity prices both in domestic and international markets.
Month to month inflation stood at 6.84% in September this year, which is lowest level since 2011, according to data Bangladesh Bureau of Statistics (BBS) released in Dhaka yesterday. In August, it was 6.91%.
Policy Research Institute Executive Director Ahsan H Mansur said falling commodity prices in the global and local markets has helped lower inflation rate in the country. In the international market, commodity prices so far dropped 25%, he said.
The factors like appreciation of local currency against greenback, fall in inflation in neighbouring India and realistic monetary policy have contributed to sliding inflation, he added.
According to the BBS, food inflation in September dropped to 7.63% from 7.67% in August while non-food inflation rose to 5.63% from 5.76% during the period.
Bangladesh Bank, in its policy statement (July-December) said the FY15 inflation target announced in the national budget is 6%.
Reducing average inflation from its current level may prove challenging especially as aggregate demand is likely to pick up in the first half of this fiscal and in general twelve-month average inflation, by definition, only changes in an incremental manner, it said.
It said the central bank will continue to focus on achieving its inflation targets while providing sufficient space in its monetary programme for lending to activities which support broad-based investment and inclusive growth objectives.
The persisting inflationary pressures over the past few months with the risks ahead related to the inflation outlook imply that achieving the FY15 inflation target of 6.5% will be challenging, it said.
As such BB has decided to keep policy rates unchanged. The Cash Reserve Requirement (CRR) was raised in June 2014 by 50 basis points to absorb part of the excess liquidity and help contain inflation – this remains unchanged.
BBS data also showed that in urban area inflation rate in September was 7.02%, which was 7.08% in August and in rural areas, it declined to 6.75% from 6.83% during the period.
The food inflation declined in rural areas in September this year to 7.52%, down from 7.56% in the previous month of August.
The non-food inflation in rural areas also declined to 5.31% compared to 5.46% in the previous month. In urban areas, the food inflation rate decreased to 7.88% in September from 7.89% in August this year.
The non-food inflation rate in urban areas also witnessed a down trend in September as it stood at 6.07% as against 6.19% in August this year.
Besides, the national wage index rate witnessed a 10.62% growth in September this year with 8,661.20, up from 8,612.73 in August this year.
While releasing inflation data at the Planning Commission, Planning Minister Mustafa Kamal said the target of the government is to contain inflation rate within 6.5% in the current fiscal year.
