Inflation slightly eases to 9.17% in April
Food and non-food inflation also dropped to 8.63% and 9.61%, respectively
Inflation eased further in April, falling to 9.17% from 9.35% in March, according to data released by the Bangladesh Bureau of Statistics (BBS) today.
However, despite the decline, inflation in the country has remained above 9% for the past 26 months. The last time it fell below 9% was in February 2023.
Both food and non-food inflation also declined during the month. Food inflation dropped to 8.63% in April from 8.93% in March, while non-food inflation fell to 9.61% from 9.70%.
Explaining the drop in inflation, Dr Zahid Hussain, former lead economist at the World Bank's Dhaka office, told TBS that it is difficult to explain the fall in both food and non-food inflation in urban and rural areas purely from the supply side.
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The seasonal effect is unlikely to have played a role in vegetable prices in April. We also can't say there was an overall surge in supply across the board. If supply was the reason, product prices would have dropped, but they have actually gone up. It's only the rate of increase that has slowed, not the prices themselves. So, the most likely explanation for the easing of inflation is a slowdown in demand growth, he said.
The economist further said, "This slowdown in demand growth could have occurred for two reasons. First, post-Eid demand may have dipped in April. Since Eid fell on 1 April, most purchases were made in March. Second, the tightened monetary policy may have begun to take effect. Both factors may have contributed to lowering inflation. However, the real test of monetary policy's impact on inflation will be clearer from the May data."
According to BBS data, rural inflation stood at 9.15% in April, down from 9.41% in March. In rural areas, food and non-food inflation in April were 8.40% and 9.86%, respectively, compared to 8.81% and 9.97% in the previous month.
Similar to rural areas, all types of inflation in urban areas also declined. In April, urban inflation stood at 9.59%, down from 9.66% in March. Urban food inflation dropped slightly to 9.13% in April from 9.18% in March, while non-food inflation came down to 9.88% from 9.95%.
Meanwhile, wage growth increased slightly in April. BBS data shows that the general wage growth rose to 8.19% during the month, up from 8.15% in March.
However, wage growth has remained below the inflation rate for the past 39 months.
