Point-to-point inflation soared by 0.58 basis points to 6.05 per cent in November, a record two years’ high, compared with that of 5.47 per cent in October due to a surge in the prices of onions and other commodities, according to the Bangladesh Bureau of Statistics data.
The previous highest overall inflation was 6.12 per cent in September, 2017.
Food inflation also hit an 18-month high to 6.41 per cent in November, increasing by 0.92 basis points from that of 5.49 per cent in October, the data showed.
In May, 2018, food inflation reached 6.56 per cent.
The point-to-point inflation and food inflation in both urban and rural areas also jumped significantly in November.
Planning minister MA Mannan on Tuesday revealed the monthly inflation data at the post-ECNEC meeting press briefing held at the National Economic Council auditorium in Dhaka.
He said that the point-to-point inflation went up in the month due mainly to the recent price hike of onions.
He said that the upward trend in inflation would be temporary as it would decline once the prices of onions and vegetables went down.
The government is trying to bring the prices under control, he added.
Centre for Policy Dialogue distinguished fellow Mustafizur Rahman, however, said that rising inflation was the reflection of pressure of price hike of food items as the prices of almost all the food items increased recently.
So, the onion price hike was not the only reason for inflation rate rise as the item accounts for a very small portion of people’s overall food consumption, he said.
He said that the differences between the supply of and the demand for food items including onions, and inflation at the import stage due to the depreciation of the US dollar also contributed to inflation in November.
There are also structural weaknesses, including market cartel, control of middleman on food items and extortion in transports carrying food items, in the system.
‘These are the reflection of weakness of macroeconomic management and it is not a good sign as it will create various problems in the macroeconomic management putting an impact on interest rates of savings and lending,’ he said.
It will also affect purchasing power of lower- and middle-income groups of people, he said.
So, forward-looking steps, including supply and demand management, ensuring governance in value chain, reducing transport cost and making supply chain more efficient, are required to control the inflation, he said.
At the briefing, Mannan also said that Bangladesh gross domestic product (GDP) growth finally stood at 8.15 per cent in last fiscal year of 2018-2019.
The BBS’s provisional estimate for the fiscal was 8.13 per cent.
Country’s per capita income also increased to Tk 1,60,440 in the final calculation from the provisional estimate of Tk 1,60,060.
The final GDP calculation was placed before the ECNEC meeting presided over by prime minister Sheikh Hasina.
The prices of onions skyrocketed to Tk 250 a kilogram in November, increasing from Tk 150 a kg in October.
The prices of onions had jumped to Tk 120 a kg overnight in October 1 from Tk 70-80 a kg in late September following India’s onion export ban imposed on September 29.
The prices of the spice have yet to come under control despite the government’s various efforts, including selling onions at lower prices by the Trading Corporation of Bangladesh and increasing imports by the private sector from various countries except India.
The prices of vegetables and rice also increased in November.
According to the BBS data, non-food inflation also slightly increased to 5.47 per cent in November, which was 5.45 per cent a month ago.
The BBS data showed that the point-to-point, food and non-food inflation rates in both urban and rural areas increased in November from the previous month.
General inflation in the urban and rural areas stood at 6.12 per cent and 6.01per cent respectively in November, increasing from 5.67 per cent and 5.36 per cent a month ago.
In November, food inflation in the urban and rural areas increased to 6.11 per cent and 6.54 per cent respectively from that of 5.31 per cent and 5.56 per cent a month ago.
Non-food inflation in the urban and rural areas also increased to 6.13 per cent and 4.99 per cent respectively in November. In October, non-food inflation in urban areas was 6.09 per cent and that in rural areas was 4.96 per cent.
According to the BBS data, the national wage index rate, however, increased slightly to 6.42 per cent in November from 6.38 in the previous month.
Wage index rates for the three main sectors — agriculture, industry and services — also witnessed a rise to 6.55 per cent, 6.11 per cent and 6.44 per cent respectively in the month from 6.50 per cent, 6.08 per cent and 6.43 per cent respectively in October.
Mannan at the briefing also disclosed the implementation rate of annual development programme.
The government ministries and divisions implemented only 19.24 per cent or Tk 41,387 crore of the ADP in July-November period of the current fiscal year of 2019-20.
The implementation rate was 20.15 per cent or Tk 36,438 crore in the same period of last fiscal year of 2018-2019.
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