Bangladesh: Inflation rises in FY14 on soaring food prices

Dhaka, July 11 (New Age): The average point-to-point inflation increased to 7.35 per cent in the immediate past financial year of 2013-14 from that of 6.78 per cent in the previous year due to soaring food prices. The Bangladesh Bureau of Statistics data released on Thursday showed that the average point-to-point food inflation witnessed a big jump reaching 8.56 per cent in FY2013-14 which was 5.22 per cent in the previous FY 2012-2013. The average inflation has been calculated based on monthly inflation rates. The average non-food inflation, however, declined to 5.55 per cent in the last FY compared with that of 9.17 per cent in the previous year. The government had set a target to contain point-to point inflation within 7 per cent in FY14. BBS officials said that hike in food prices was the main reason for the increase in the average yearly inflation in last fiscal year. They said political unrest during the first half of the financial year, which pushed up the transport costs, contributed to the increase in food items. Experts said that the government failed to meet its inflation target while other economic indicators were declining because of the mismatch between the fiscal and monetary policy along with the political instability. Bangladesh Institute of Development Studies research director Zaid Bakht said, ‘Political instability and some policy mismatch were the main reasons for which the government could not bring down inflation at expected level. Increasing inflation is affecting overall economy,’ he told New Age on Thursday. BBS data, however, showed that the point-to-point inflation dropped to 6.97 per cent in June from that of 7.48 per cent in May. The non-food inflation increased to 5.45 per cent in June from May’s 5.16 per cent. The food inflation declined to 8.00 per cent in June which was 9.09 per cent in May. ‘The decrease in the food inflation in June had a positive impact on the overall inflation in the month,’ BBS director general Golam Mostafa Kamal told reporters in a briefing on Thursday.