Staff Reporter :
Food inflation in Bangladesh surged to 14.1 percent in July, the highest at least in a decade as prices showed no signs of cooling down, hitting the pockets of the consumers who spend most of their incomes to feed their families.
Correspondingly, overall inflation hit 11.66 percent in July, the highest at least since 2010-11 fiscal year, reflecting the worsening of the purchasing capacity of people, according to the Bangladesh Bureau of Statistics (BBS) published on Monday.
Non-food prices rose 9.68 percent last month from 9.15 percent in June, said the BBS.
Earlier, in June the overall inflation was 9.72 percent.
The month of July was marked by protests that began demanding quota system reforms in government jobs.
A crackdown by the government on dissenters further provoked the protests, with agitators soon demanding the resignation of the government.
July saw a number of days with curfew in place, disrupting supply chains and hampering smooth operations of people and businesses.
Rail and port services were also suspended at this time.
“Inflation rising in July is not an unusual development as a curfew was imposed which disrupted supply chain and led to commodity price hike,” said Dr Zahid Hussain is former lead economist of the World Bank’s Dhaka office.
The government imposed a curfew from 12:00am on 20 July which lasted, both strict and relaxed forms, till 6:00pm 6 August amid the countrywide student movement.
Zahid Hussain said there was no market-to-market communication last month.
“Prices rose higher wherever there was a shortage. In addition, prices did not decrease despite surplus in some places.
So, it can be said that supply disruption is the main reason for the increased inflation,” he said.
The former WB economist also said uncertainty and hoarding might also have contributed to the rising inflation. “Due to the curfew, many people bought items for a whole week at once.”
He pointed out that everyone might have had a tendency to buy a little too much than they need.
Another element behind the jump in inflation, Zahid said, is “fearless disclosure” of inflation data.
“The BBS may not have any fear of publishing inflation data because of the new government.
We haven’t seen inflation rise above 10 percent before. Everyone said inflation has crossed 10 percent.
But when we go to the market, it feels like inflation has crossed 20 percent.” he added.