October ended with good news for both inflation and the wage rate index (WRI). According to the latest Bangladesh Bureau of Statistics (BBS) data, inflation is going downward for the second straight month.
General inflation in October fell to 8.91% from 9.1% in September. Meanwhile, the wage rate index increased to 6.91% in October from 6.86% in the previous month.=
Within two months, Bangladesh's general inflation rate fell 61 basis points, which was 9.52% in August.
However, non-food inflation rose by 45 basis points (bps) to 9.58% in October from 9.13% in September.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), believes that there are several reasons behind inflation coming down in the last two months.
“The prices of major commodity items have remained somewhat stable, mainly because the price did not increase. With winter vegetables coming into the market, the prices of vegetables came down a bit.
“The prices of chicken and egg are also quite stable compared to the way they were rising up before. I think these have played a major role in reducing inflation in the last two months,” he said.
“After Aman rice enters the market, the price of rice will also decrease a little more. In that case, inflation is expected to come down further in the next few months,” he added.
BBS data also revealed that wages rose by 5 bps in October compared to September.
Regarding Wage Rate Index rise, Ahsan H Mansur said: “I think the increase in the income of lower-level workers or day labourers has played a big role behind the increase in the wage index. Basically, if the price of daily commodities increases, the income of a rickshaw puller or day labourer increases slightly as they ask you to give them some extra wages.”
Following the Executive Committee of the National Economic Council (Ecnec) meeting on Tuesday, Planning Minister MA Mannan told reporters: “We have to be discriminatory and careful while choosing projects and approving them. However, we will not compromise on small projects, rural projects, and development projects. We have to be careful and research deeper only in case of larger projects.”
“The prime minister emphasized that we have to be frugal. We have to avoid luxuries in all walks of life,” the minister added.
“We have to put more importance on agriculture. We have to produce any kind of food we can. We have to be self-sustainable so that in case of a crisis, we can at least live on our own food,” he added.
The prime minister also directed deputy commissioners to visit the areas under their jurisdiction to see if there is any land left uncultivated.
“We cannot force people to produce crops. But we can motivate them and offer any kind of help they might require,” said the minister.
Basis points, otherwise known as bps or bips, are a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form.
In the 2010-11 fiscal year (FY), the average inflation rate of the country was 10.92%. After that, this index stayed below 9%.
Due to the increase in prices of daily essentials and fuel in the international market, there was a trend of rising inflation in the country for several months.
On August 5, the government increased fuel prices by 42% to 51%. The diesel price was increased by Tk34 per litre, octane by Tk46 per litre and petrol by Tk44 per litre. This record jump in fuel prices contributed to record inflation, but now it has begun to climb down from this peak.
