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The overall inflation in June eased at 9.72 per cent, but the food inflation still persisted at over 10 per cent for the third consecutive month amid price spiral of daily essentials.

The Bangladesh Bureau of Statistics on Sunday said that it recorded overall inflation at 9.72 per cent in June compared with 9.78 per cent in May.

It calculated food inflation at 10.42 per cent in June, featuring the double-digit food inflation for the third month in a row mounting pressure on the low and fixed income groups struggling to maintain decent diets with very limited incomes.

The food inflation rate was 10.76 per cent in May and 10.22 per cent in April.

Economists criticised the government saying that its initiatives to check the price spiral of essential kitchen items were inadequate.

The market monitoring was ineffective, while the data about and supply and demand were doubtful, said Centre for Policy Dialogue distinguished fellow Mustafizur Rahman.

On May 9, Bangladesh Institute of Development Studies director general Binayak Sen at a programme reportedly said that food inflation in May actually reached 15 per cent, but the BSS calculated it at 10.76 per cent.           

The monthly inflation data in June also featured yet another financial year ended in high inflation.

The BBS recorded average inflation in FY24 (July 2023–June 2024) at 9.73 per cent after the average inflation of 9.02 per cent in FY23.

The BBS record shows that such high inflation, close to double-digit for two years in a row, did not happen after 1980s.

The average inflation in FY24 also is also the highest since FY11 when the inflation was recorded at 10.92 per cent.

Finance minister Abul Hassan Mahmud Ali, while presenting the current budget in the parliament on June 6, remarked that checking inflation would be his main challenge in FY 25.

He projected to keep the inflation at 6.5 per cent.

Economists, however, observed that the finance minister did not elaborate how he would achieve the target amid the ongoing dollar shortage hampering imports.     

‘The government has to do a lot of things to check the inflation,’ said Policy Research Institute executive director Ahsan H Mansur.

The measures included tightening of the monetary policy, increasing the supply of essentials and strengthening of the market monitoring.

‘The Bangladesh Bank has adopted contractionary monetary policy, but success of the policy hinges on the fiscal policy,’ said Ahsasn H Masur.                  

The International Monetary Fund that is providing loan worth $4.7 billion to the government against the backdrop of economic downturn persisting since April 2022 said that the inflation rate might ease at 7.2 per cent in FY25 on the back of the continued tighter policy mix and projected lower global food and commodity prices.

The BBS monthly update also shows that food inflation was higher at 10.54 per cent in the urban areas against 10.39 per cent in rural areas in June.

The non-food inflation in June, however, was higher in rural areas than urban ones with the overall inflation recorded at 9.15 per cent in that month.