Point to point inflation in July surged at 11.66%, the highest in the last decade, according to the latest report of the Bangladesh Bureau of Statistics (BBS).
The overall inflation in June was 9.72% and it increased by 1.94 percentage points in the first month of the current fiscal year and the last month of the over 15 years of Awami League government.
The BBS made public the July issues of its regular report titled, “Consumer Price Index (CPI), Inflation Rate and Wage Rate Index (WRI) in Bangladesh” which found a jump of 3.68 percentage point in food inflation.
Food inflation stood 14.1% in July, the highest in the last 14 years, which was 10.42% in June, according to the report.
The experts and economists found disruption in the supply chain caused by movement of students as a minor factor behind the huge inflation.
They anticipated that the prices of goods and services increased significantly in the recent couple of years, but the BBS showed lower inflation due to political influence.
Dr Selim Raihan, professor of economics at Dhaka University and the executive director of the South Asian Network on Economic Modeling (Sanem) said that the BBS has shown lower inflation rate in the recent years but we were saying based on data evidence that real inflation was much higher.
“BBS was forced to do this at the behest or to please the politically powerful. But now that no one is in charge to object to inflation data, fairly reliable data is released,” he said.
The non-food inflation in July increased slightly from 9.15% in June to 9.68% in July.
The economy is facing an inflation rate of over eight percent in the period of the last two years.
Experts and economists expressed confusion over the reliability of the BBS data frequently and they recommended the BBS to provide real data.
Estimating with a relatively small size data sample, the Sanem found over 14% food inflation and the state owned Bangladesh Institute of Development Studies (BIDS) also found a higher inflation than the BBS data.
The BBS compiles the rate of inflation each month based on the information of the prices of food and non-food items over the country to identify the change in the cost of living.
A 11.66% inflation in July represents an increase of the cost of living at the same rate in the last year.
Bundle of commodities sold at Tk 100 in July of last year is now at Tk111.66. People with fixed income have to consume a lower amount of goods and services.
However, the income of wage earners increased by 7.93% in July compared with the same period of the last year, revealed the report by the BBS.
Economist Ahsan H Mansur said that the disruption of the supply chain due to students’ protest contributed a little rise in the food items, while the independence of data helped reveal the real picture.
He recommended immediate measures by the government regarding tightening the monetary policy, supervision of markets to ensure competition and eliminate rent seeking, austerity in the public spending to tackle the inflationary challenges.
