Inflation rises in 2019

The average inflation rate rose by 0.04 percentage points in 2019 compared with the previous year. 

The rate stood at 5.59 percent last year, up from 5.55 percent in 2018.  

However, inflation in December dropped to 5.75 percent from the previous month's 6.05 percent, according to the Bangladesh Bureau of Statistics (BBS).

The official statistical agency has attributed the drop to the declining prices of food items. 

Planning Minister MA Mannan, revealing the latest inflation figures on Tuesday said, "Prices of vegetables fell due to an adequate supply in the winter season. Prices of fish have been comparatively lower for a few months. Rice also is available at a cheaper rate as Aman harvesting has already begun." 

The rate of inflation dropped as a combined effect of these developments, he explained. 

The Bangladesh Bureau of Statistics (BBS) noted that inflation in the matter of food items dropped to 5.58 percent in December, which had been 6.41 percent in November.

Non-food inflation increased to 5.55 percent in December from 5.47 percent in November.

In 2019 cost of living rose by 6.5 percent, from 6 percent in the previous year, according to a report by the Consumers Association of Bangladesh (CAB).

According to the report, cost of goods and services rose by 6.08 percent last year, which was 5.19 percent in 2018.

Professor M Abu Eusuf of development studies at the University of Dhaka told The Business Standard that an inflation rate below 6 percent is acceptable in Bangladesh compared with the current growth pattern.

"Inflation fell in December owing only to a fall in rice prices in the harvesting season," he said, adding that a drastic fall in rice prices is not good for farmers.

The economist recommended maintaining reasonable prices of agricultural products round the year.

The BBS report said inflation in rural areas dropped to 5.76 percent in December from 6.01 percent in November.

Food inflation dropped to 6.12 percent from 6.54 percent and non-food inflation increased to 5.07 percent from 4.99 percent in rural areas at the same time.

Meanwhile, inflation in the area of food items eased to 5.34 percent in December from the 6.11 percent in November in urban areas.

Non-food inflation slightly rose from 6.13 percent in November to 6.19 percent in December. 

General inflation in urban areas dropped to 5.73 percent in December, which was 6.12 percent in the previous month.

The BBS calculates a Consumer Price Index every month to find the rate of inflation, which shows the degree of average increase in the cost of living standards over the last one year.

The December inflation rate of 5.75 percent indicates that a commodity, which was Tk100 last year, will now cost Tk105.75. One will have to buy a lower volume of the commodity if one's income remains static.

Meanwhile, the rate of wage increase reached 5.76 percent in December compared to that of the previous year, mentioned the BBS report.