March inflation hits 6.22% – highest in 17 months

Due to a sharp rise in food prices, the overall point-to-point inflation in March rose to 6.22%, the highest in 17 months.

Overall inflation was 6.17% in February. As a result, inflation rose 0.05 percentage points during the month. All this information has come up in the monthly inflation report of the Bangladesh Bureau of Statistics (BBS). 

According to a report published online on Tuesday, food inflation rose to 6.34% in March and non-food inflation stood at 6.04%.

In February, food inflation was 6.22% and it stood at 6.1% in the non-food sector. Inflation in the food sector rose by 0.12 percentage points in one month but declined by 0.06 percentage points in other sectors.

A review found that while food inflation has been on the rise for several months, it reached an all-time high in February. Food inflation rose 0.62 percentage points from 5.6% in one month to 6.22%.

People concerned say the Russia-Ukraine war has pushed up the global inflation exacerbating the international markets which were already heated up in the wake of the recovery from the coronavirus pandemic.

Gas, oil and other fuel prices set new records in the world market. As the war started in the main supply area of wheat, the price of the product in the world market increased by about 40%.

Soybean and palm oil prices went up by about 50% in the domestic market due to an increase in edible oil prices in the international market.

The prices of sugar, onion, garlic and other food items also increased in the country's market. Experts fear inflation could rise further if the Ukraine-Russia war does not end soon.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said inflation in the country's market has risen due to the reasonableness of rising prices in the world market as well as the tendency of businesses to raise prices unreasonably.

"The real inflation could rise further if the rising rate of commodity prices in the world market, and the impact on the country's market are entirely taken into consideration," added the eminent economist.

Commenting that there is no possibility of a sudden reduction in inflation in the future, he said that the impact of inflation caused by the impact of rising fuel prices in the world market is very long-lasting.

"Apart from that, food prices may rise due to the tendency of stockpiling in different countries including China," he added.

He said inflation could also rise due to huge import dependence, declining reserves at the Bangladesh Bank and depreciation of taka (local currency) against foreign currencies.

The economist thinks that the price of rice may go down temporarily as the Boro paddy season is approaching. He said the trend of declining prices during the rice season is not very strong in recent times. In the rural areas, the price of rice has come down during the season, but in a few days, it returns to its previous level.

Zahid Hussain suggested that instead of conducting scattered operations in the market by the government to control overall inflation, the supply of food through the Trading Corporation of Bangladesh (TCB) should be substantially increased.

He also suggested the expansion of cash assistance programmes to maintain the living standards of the poor.

The BBS claimed that despite the massive inflation, the inflation in the urban areas was at a tolerable level in March. Inflation in urban areas was 5.69% as against 6.52% in rural areas, the report said.

In rural areas, food prices rose 6.71% last month, according to the BBS.