Business Report :
Domestic products were the primary drivers of inflation in Bangladesh, accounting for 74 percent of the overall inflation in September 2024.
Domestic items contributed 61 percent to inflation in June, highlighting the growing impact of local factors, as per the data from the central bank’s quarterly .
“Inflation Dynamics in Bangladesh, July-September 2024,” the report said the contribution of perishable goods to inflation rose from 18% in the June quarter to 23% in the September quarter, while the impact of import-concentrated items fell from 39% to 26%.
Economist Fahmida Khatun said the prices of perishable goods have risen due to inadequate preservation, adding, “If these goods perish, they cannot be quickly replaced.”
Dr Fahmida Khatun, director on the Bangladesh Bank board and executive director of the Centre for Policy Dialogue, states that the impact of imported items on inflation has decreased because of price reductions in the global market.
She further added “In fact, our imports have significantly declined compared to before. Food prices have fallen in the international market, and the import volumes of non-food items have also dropped. As a result, the import-driven impact on inflation is expected to lessen, which is a normal occurrence.”
The central bank report says Bangladesh continued to face persistent inflationary pressures during the first quarter of FY25, with headline inflation reaching 11.7% in July – the highest in 12 years – before moderating to 9.9% in September.
“Food inflation surged, hitting 14.1% in July before decreasing to 10.4% by the end of the quarter. Cereals and vegetables emerged as significant contributors to food inflation during the first quarter of FY25, along with protein-based food items,” reads the report.
By comparison, the contribution of import-dependent items to inflation fell to 26 percent in September, down from 39 percent in June.
The year-on-year consumer price index (CPI) inflation surged to 10.7 percent in the first quarter (July-September) of the current fiscal year.
July recorded a 12-year high inflation rate of 11.7 percent, and inflation remained elevated at 9.9 percent in September, compared to 9.6 percent in the same month last year.
Persistent inflation was driven by high commodity and energy prices, along with currency depreciation.
Food inflation peaked at 14.1 percent in July, the highest in 13 years, before falling to 11.4 percent in August and 10.4 percent in September.
Non-food inflation increased modestly, averaging 9.6 percent in Q1 of FY25, up from the previous quarter.
More than half of the headline inflation during this period came from food prices, while energy inflation’s contribution declined.
Cereals, vegetables, and protein-based items were key contributors to food inflation, according to the report.
Non-food inflation also saw a rise, with housing, health, and personal care expenses adding significant pressure.