Inflation rate crept up in March for the second month in a row as deepening political unrest crippled the country’s supply chain.
The political crisis stoked the inflation in March to 6.27% from 6.14% in February with food prices increasing due to higher transport cost, according to the Bangladesh Bureau of Statistics data released yesterday.
The unrest, however, has eased now.
“Higher transport cost due to the political turmoil was the main trigger in the inflation in March,” said Planning Minister AHM Mustafa Kamal at a press briefing in Dhaka yesterday.
A BSS official said food prices soared in March at a slower rate as the situation slowly returned to normalcy.
Overall month to month food inflation increased to 6.37% in March from 6.11% in February, the BBS data showed. In contrast, the non-food inflation moved down 6.12% from 6.20% in the previous month. Prices of goods, mostly produced in the rural areas, increased because of the supply chain disruption.
According to the Trading Corporation of Bangladesh, in last one month the egg prices rose 3.5%, broiler 5.2%, potato 29.7% and Hilsa 43%. But other items including rice, oil and pulse dropped slightly.
BBS data also showed that in urban area inflation rate in March was 6.77%, which was 6.62% in February and in rural areas, it was up 6.01% from 5.89%.
In urban area food inflation surged 7.36% from 7.02% but in rural areas, it rose to 5.95% from 5.72% during the period. In the case of non-food inflation, it was down both in urban and rural areas.
The government aims to trim inflation to 6.5% in the current fiscal year.
The national wage index rate witnessed a rise of 9.27% growth in February from January’s 9.24%.
The central bank has kept its key policy rates unchanged since February 2013 when it cut repo and reverse repo rates for the first time since 2009, by half a percentage point.
According to the latest monetary policy statement, progress in bringing annual average CPI inflation down from 7.35% at the beginning of fiscal year 2015 to 6.5% by June 2015 is broadly satisfactory, with 6.99% level by close of the first half of fiscal year 2015.
Last week, the Asian Development Bank revised down Bangladesh growth forecast for the fiscal year, saying the economy will grow by 6.1% instead of 6.4% as estimated earlier, due to the dragging political stalemate.
The ADB said inflation would be 6.5% in the current fiscal year and 6.2% the following year.
The government has initially targeted 7.2% GDP growth for the current fiscal year, but Finance Minister AMA Muhith has hinted that the growth target has to be revised down as the countrywide blockade and strikes hit the economy hard.
