Inflation falls further in October
Inflation came down to 5.40 percent in October, the lowest in 18 months, on the back of a continuous fall in food prices.
Last month's inflation figure was 3 basis points lower from September, according to the Bangladesh Bureau of Statistics (BBS).
The last time the inflation rate was lower than this was back in March 2017, when it stood at 5.39 percent.
Overall inflation has fallen every month so far this year.
In October, food inflation fell 36 basis points to 5.08 percent from the previous month. This was preceded by a decline of 55 basis points in September from that of the previous month.
However, non-food inflation shot up 45 basis points to 5.90 percent last month. It went up 72 basis points in September from that a month ago.
Zahid Hussain, lead economist at the World Bank Dhaka office, said food inflation has continued to decline, but non-food inflation rose to its highest level in the last 24 months.
Non-food inflation was 3.6 percent in October 2017.
Hussain said the rise in non-food inflation has been much sharper in urban areas than in rural areas. The rise in clothing, footwear, furniture and household equipment and transport prices appeared to have contributed most to the increase in non-food inflation generally and in urban areas in particular.
“While it is reassuring to see that the growth in nominal wages in agriculture, industry and services has marginally outpaced both headline inflation and non-food inflation, thus preventing the erosion of the purchasing power of wages, a large section of the population whose incomes are fixed in the short run must be hurting because of the persistently rising non-food inflation since January 2018.”
“Supply chain disruption and rising cost of imports may be contributing to these price increases since both monetary growth has remained fairly low and implementation of fiscal expansion has been contained so far.”
The government has set an inflation target of 5.6 percent for the current fiscal year.
