Food inflation falls by 2.2 percentage points to 10.72% in January
Food inflation was recorded at 12.92% in December and 13.8% in November
Food inflation in Bangladesh continued its downward trend in January, declining by 2.2 percentage points to 10.72%, according to the latest data from the Bangladesh Bureau of Statistics (BBS) released on Tuesday (4 February).
The figure stood at 12.92% in December and 13.8% in November.
The decrease in food inflation contributed to an overall reduction in general inflation, which fell to 9.94% in January, down from 10.89% in December.
This marks the first time in three months that inflation has returned to a single-digit rate. The last time inflation was below 10% was in September 2023, when it stood at 9.92%.
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However, non-food inflation edged up slightly to 9.32% in January from 9.26% in December.
Mohammed Mizanur Rahman, director general at the BBS, told The Business Standard that the drop in food inflation was due to increased supply of essential commodities during the winter season.
Fahmida Khatun, executive director at Centre for Policy Dialogue echoed a similar view, stating that the increase in food supply has helped curb the inflation rate in January.
"The key driver behind the decline was the improved availability, production, and distribution of food products. Additionally, monetary policy has started to take effect," she told TBS.
The economist added that monetary measures alone cannot effectively reduce inflation without addressing supply-side constraints.
"We had previously pointed out that inflation control requires resolving supply chain issues. Now, we are seeing improvements not only in food supply but also in other essential goods, with strong agricultural production supporting this trend," she said.
Fahmida also identified two critical areas that need attention to ensure long-term inflation control. "Extortion and rent-seeking within the supply chain drive up prices. Tackling these issues will help stabilise inflation more effectively."
Persistent inflation challenges
Despite the recent decline, inflation remains high, posing difficulties for low-wage earners in affording daily essentials. According to BBS data, overall inflation has remained above 9% for over two and a half years.
Earlier on the day, Finance Adviser Salehuddin Ahmed, speaking after a meeting, said although 5% inflation is ideal for Bangladesh, various factors have made it challenging to keep inflation under control.
However, he said inflation could drop to 6%-7% by June due to ongoing measures.
"The government has already taken several initiatives to curb inflation, and additional steps will be introduced to stabilise essential commodity prices during Ramadan," he added.
Urban, rural inflation trends
In rural areas, general inflation fell from 10.09% in December to 10.18% in January, while in urban areas, it dropped from 10.84% to 9.89%.
Food inflation in rural areas stood at 10.61% in January, down from 12.63% in December, while in urban areas, it declined to 10.95% from 13.56% the previous month.
Meanwhile, non-food inflation in rural areas increased slightly to 9.77% in January from 9.65% in December, and in urban areas, it rose to 9.25% from 9.17%.
BBS data also shows the average wage growth rate in January was 8.16%, up marginally from 8.14% in December. However, wage growth has remained below inflation for the past 36 months, further straining household finances.
