Food inflation continued to maintain an upward trend in May, pushing overall inflation to a seven-month high and compounding the miseries of the majority population.聽
The Bangladesh Bureau of Statistics recorded food inflation at 10.76 per cent in the past month on a point-to-point basis amid the price hikes of almost all necessary essential items, including rice, eggs, pulses, chicken, meat, sugar, and vegetables, ahead of the new national budget.
According to economists, the price spiral of essential commodities was the result of poor market monitoring and ineffective law enforcement, which led to the majority of people having to pay for increasing food costs with a limited and fixed income in the outgoing FY24.
This was the second consecutive month that food inflation prevailed over 10 per cent, according to the BBS monthly update released on Monday.
Earlier, the food inflation rate had gone up to 12.56 per cent in October 2023 and 10.76 per cent in November 2023 before it slowed down below double-digits in December, January, February, and March.
The BBS update also showed that overall inflation went up to 9.89 per cent in May, the highest since October 2023, when overall inflation hit 9.93 per cent.
Executive Director of the South Asian Network on Economic Modeling Selim Raihan said that there was a lack of coordinated efforts among the government agencies to check food price hikes.
Government data on supply and demand are also doubtful, he said.
The Bangladesh Institute of Development Studies has already found that food inflation in December was around 15 per cent, higher than the BBS calculation of 9.58 per cent.聽聽
Bangladesh Bank, in a report released on Thursday, said that proper market intervention and implementation were needed to address the widening gap between retail and wholesale prices of essential items that were contributing to high food inflation.
Selim Raihan said that the Bangladesh Competition Commission should develop a database and monitor the leading market players to check for manipulation.
The BBS update also showed that food inflation was higher at 10.87 per cent in urban areas than at 10.73 per cent in rural areas in the past month.
Overall inflation maintained an upward trend despite the easing of non-food inflation in May at 9.19 per cent from 9.34 per cent in April, according to BBS.
The overall 12-month average inflation has been recorded by BBS at 9.73 per cent between June 2023 and May 2024, after overall inflation hit a decade-high of 9.02 per cent in FY23.
Policy Research Institute executive director Ahsan H Mansur lamented that the high inflation in the country had become unstoppable, although many countries had already tamed it.
Debt-ridden Sri Lanka has successfully brought down inflation from 50 per cent in April 2022 to 1.5 per cent in April 2024.
Mansur attributed the high inflation to policymakers鈥� blunders over the past two years, combined with poor market monitoring.
BB has taken some measures to tighten the money supply under the $4.7 billion loan programme from the International Monetary Fund.
The policy, however, may not be effective without market monitoring, according to Ahsan H Mansur.
The overall high inflation against the low wage increase recorded at 7.88 per cent in May by BBS demonstrated that fixed and low-income groups were compromising with costs of food, health, and education or breaking savings.
On Sunday, the Centre for Policy Dialogue said in a report that the country鈥檚 people were spending more on food than many rich countries amid persistent food price hikes.
It was calculated that the average annual expenditure on food per person in Bangladesh was $924 in 2022, compared to $882 in Brazil and $874 in Colombia, although both Latin American countries enjoy much higher per capita income than Bangladesh.
Economists said that finance minister Abul Hassan Mahmood Ali was facing a daunting challenge to keep high inflation under control with the new fiscal measures to be announced on Thursday.
The IMF projects inflation to go down to 7.2 per cent in FY25.
