The country’s rate of inflation jumped to 7.5% in January due to higher prices of non-food items owing to disruption in production and distribution during the hartals and blockades ahead of January 5 election.
Economists say the inflation rate might go through volatility because of prevailing economic uncertainty.
Official data released yesterday showed the overall inflation touches the fiscal’s target of 7.5% and rose above the previous month’s 7.35%, which is highest since July 2013.
Bangladesh Bank in its latest monetary policy apprehended it would be a challenge to reduce the average inflation from the fiscal target as aggregate demand is likely to pick up in the second half of current fiscal year.
The recent rise in Indian inflation is also a risk for Bangladesh as shown by historical long term trends, it said.
The food inflation marginally dropped to 8.81% from December’s 23-month high of 9%.
But non-food inflation stood at 5.53% from 4.88% in the previous month.
“Food prices came out of pressure because of improved supply situation as last month faced no shutdowns,” said BBS Director General Golam Mostafa Kamal.
He said the food commodities remained stock during the shutdowns and are now in the market, leading to increase the supply.
But non-food inflation rose because imports of goods have been hampered due to the recent blockades and shutdowns. “Unloading of goods at the port suffered and the chain effect still continues,” he said.
According to Bangladesh Bureau of Statistics (BBS), the overall inflation in rural areas surged 7.24%, up from 7.22% in the previous month, while in urban areas it rose to 7.97% from 7.58%.
“The economy is going through political uncertainty, resulting volatility in many indicators,” said economist Mustfa K Mujeri.
Food and non-food inflations are not steady too, as production and distribution of products are not functioning smoothly due to political or many other reasons, he said.
“Under this volatile situation, it is hard to predict.”
