While food inflation has been hovering near double digits in July at 9.76%, in August it finally leapt up to 12.54%.
According to data released by Bangladesh Bureau of Statistics (BBS) on Sunday, food inflation other than food inflation, Inflation in August reached 9.92%, hovering close to double digits, after leapfrogging from 9.69% in earlier this year.
However, non-food inflation had declined from 9.47% in the previous month, to 7.95% in August.
Economist Prof MM Akash said that to deal with price inflation, it is necessary to understand the difference between production and marketing at the beginning. Reducing this difference can reduce inflation.
“Those who mainly import goods have separate syndicates. Due to these syndicates, once the prices of products in the domestic market have gone up, even if they are imported, the prices do not come down as expected,” he added.
The government had expected inflation to moderate in August. After the National Economic Council Executive Committee (Ecnec) meeting on August 29, Planning Minister MA Mannan had told reporters that inflation cannot be brought down by force. Effective policies should be adopted.
"I can assume that inflation will drop by 2 to 4 points soon," he also said..
The August inflation rate of 9.92% means that in August 2022, a person used to buy goods and services for Tk100, in August of this year he spent Tk109.92 to buy the same product.
That is, the cost has increased by Tk9.92 in the space of one year.
The BBS has modernized the CPI compilation from April 2023 to a greater extent by changing the base index from 2005-06 to 2021-22, introducing a new basket of goods and services with weights.
This is basically a paradigm shift in CPI compilation in Bangladesh following the latest 2020 CPI manual of the IMF.
National, urban, and rural CPIs have been constructed as per the 2021-22=100 base index instead of 2005-06=100.
It has constructed 12 groups according to the Classification of Individual Consumption by Purpose (COICOP) instead of the ILOs eight groups.
The new basket contains a total of 383 items (goods and services) with 749 varieties.
There are 127 food items with 242 varieties and 256 non-food items with 507 varieties.
Currently, the CPI data are collected from 154 markets (urban, rural, and city corporation areas) instead of 140 markets from 64 districts.
The statistical bureau followed Laspeyer's formula for CPI compilation.
