Staff Reporter :
For the 15th consecutive month, Bangladesh continues to grapple with a stubbornly high inflation rate, which reached 9.89 percent in May, marking a 15 basis point increase from April’s 9.74 percent.
Experts reveal that the surge in food inflation is alarming, climbing by 54 basis points to 10.76 percent, the highest in the past six months.
This relentless upward trend in prices is burdening consumers, especially those who allocate a significant portion of their income to feeding their families.
Conversely, non-food inflation saw a slight dip of 15 basis points to 9.19 percent from 9.34 percent, according to the latest data from the Bangladesh Bureau of Statistics (BBS), published recently.
The most concerning part is the persistent imbalance between wage growth and inflation.
For the 28th consecutive month, wage growth has lagged behind inflation, indicating a deteriorating poverty situation as many individuals are forced to reduce consumption due to declining real income.
April saw a marginal increase in monthly wage rate growth, rising to 7.88 percent from 7.85 percent in the previous month, as per the BBS report.
In an attempt to curb runaway inflation, the Bangladesh Bank has pursued a contractionary policy stance, aiming to reduce demand and stabilize prices.
Since May 2022, the central bank has raised the policy rate multiple times, currently standing at 8.50 percent as of May this year.
This marks the ninth consecutive increase in the policy rate since the tightening cycle commenced, with the most significant hike occurring in October last year, when the rate surged by 50 basis points to 7.75 percent, the largest in a decade.
Despite these efforts, inflation has shown no signs of abating. Both food and non-food year-on-year inflation rates have remained on an upward trajectory, hovering around the 10 percent mark since March 2023.This sustained high inflation has significantly elevated the cost of living while simultaneously eroding consumer purchasing power, presenting a formidable challenge for policymakers and households alike.
Regarding the current trend of inflation, in a recent study of Centre for Policy Dialogue (CPD) showed the average price of coarse rice, consumed mostly by low-income people, increased by 30 percent from Tk 40 per kg to Tk 52 per kg, between 1 January 2019 and 19 May 2024.CPD also said the price of three common types of rice in Dhaka has been consistently higher than that of Thai and Vietnamese rice.
About soybean oil, the CPD said as of April, the price of soyabean oil in the world market was Tk 105 per litre, lower than the prevailing price in the Bangladesh market.Therefore, people are earning less, but spending most on food in Bangladesh, creating grave difficulty for the poorer sections of society, The think tank expressed in its report.