Food inflation falls to 8.93% in March, general inflation rises again after 3 months
Non-food inflation increases to 9.70% in March, which was 9.38% in February
Highlights:
- Food inflation rate - 8.93% in March, down from 9.24% in previous month
- Overall inflation at 9.35%, slightly up from 9.32% last month
- Non-food inflation increased to 9.70%
- Inflation growth in second quarter of FY2024-25 is 4.48%
- Growth in agriculture and service sectors declined, raised in industrial sector
Food inflation fell to 8.93% in March from 9.24% in February, while general inflation rose slightly – after three months of downward trend – to 9.35% from 9.32% over the same period, according to the Bangladesh Bureau of Statistics (BBS).
According to the data released today (8 April), non-food inflation rose to 9.70% in March, up from 9.38% the previous month. General inflation in the country was 11.38% in November last year.
Experts suggest that the seasonal impact contributed to the decline in food inflation as the supply of vegetables was high towards the end of winter, keeping prices low. They note that due to increased demand during Eid and supply chain shortages, non-food inflation has risen.
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Dr Mustafa K Mujeri, executive director, Institute for Inclusive Finance and Development, told TBS, "Towards the end of the winter season, the supply of vegetables and other food items increased, which led to farmers being deprived of fair prices.
"On the other hand, the prices of oil and other goods were raised before Ramadan, but during the month itself, these prices did not increase again," he said.
Dr Zahid Hussain, former lead economist at the World Bank's Dhaka office, told TBS that food inflation has decreased by 31 basis points, and non-food inflation has increased by 32 basis points. As a result, overall inflation has remained nearly the same.
He said among non-food items, inflation was highest in clothing, healthcare, and transportation.
"Remittance flows had been rising even before March, and in that month, we saw a record high with over $3 billion in remittances. This influx has helped maintain people's purchasing power. Therefore, both Eid and remittances have been the main contributors to the rise in non-food inflation," said Zahid Hussain.
According to BBS data, rural area inflation decreased to 9.41% in March, down from 9.51% in February.
In March, food inflation in rural areas dropped to 8.81%, compared to 9.15% in the previous month. However, non-food inflation in rural areas increased from 9.85% to 9.97% in March.
In urban areas, inflation increased to 9.66% in March, up from 9.34% in February, while urban food inflation decreased to 9.18% from 9.47%. Non-food inflation in urban areas increased from 9.27% to 9.95%, BBS data shows.
Meanwhile, wage growth slightly increased to 8.15% in March, up from 8.12% in February, but wages have remained below inflation for the past 38 months.
Dr Mustafa K Mujeri said, "Our economy has not fully recovered yet. The rise in non-food inflation reflects the stagnation in our economy."
The prominent economist further said the government has implemented various policies and measures, but they have yet to influence inflation significantly. Inflation is continuing on its own course. "I can't say that we have been able to firmly control inflation," he said.
He also pointed out that the BBS has reported a decline in agricultural growth. "If agricultural growth remains low, inflation is likely to rise again in the future," he warned.
Referring to the instability in global trade, he said, "It cannot be said with certainty that we will be able to keep inflation within the target range of 6% to 7% in the coming months."
Impact of Trump's tariffs on inflation
On 3 April, US President Donald Trump imposed an additional 37% tariff on all imports from Bangladesh, along with reciprocal tariffs on other countries.
Dr Monzur Hossain, member of the General Economics Division of the Planning Commission, said, "It seems the impact of Trump's tariff increase will not have an immediate effect on inflation. However, if other countries follow suit and raise tariffs, costs will increase, and in that case, inflation may rise."
Commenting on the possible impact of the new US tariffs on Bangladesh's inflation, Dr Zahid Hussain said the developments so far in the US president's tariff policy seem likely to be helpful for Bangladesh's inflation.
"If the dollar weakens, our import costs will fall. Prices of coal, LNG, and crude oil will also decline. However, since retaliatory tariffs are being announced, tariffs will be added to product prices, which could push inflation up," he explained.
"But if energy prices fall, the dollar weakens, and a global slowdown occurs, inflation could ease. Whether inflation rises or falls will depend on which factors outweigh the others," he added.
