Food inflation in Bangladesh continued to surge in September, causing financial strain for families as prices remained high.
According to data from the Bangladesh Bureau of Statistics, food inflation reached 12.37% last month, slightly down from August but significantly higher than the previous year. Non-food inflation also decreased to 7.82%.
This inflationary trend contributed to a Consumer Price Index (CPI) increase of 9.63% in September, a slight drop from the previous month’s 12-year high. The rise in inflation has led to a drop in consumer purchasing power, affecting private consumption, which has slowed down, according to the World Bank.
A significant depreciation of the taka against the US dollar and foreign currency shortages have contributed to the problem.
The World Bank’s report highlighted a 179% increase in administered gas prices for the industrial sector and higher electricity prices, resulting in increased manufacturing costs.
Elevated diesel prices affected agriculture, and a substantial rise in petroleum product prices impacted transportation costs, subsequently affecting retail prices.
Even middle-income groups with fixed incomes are struggling to afford essential food items, as a significant portion of their income goes toward meeting these expenses.
Despite the central bank’s efforts to control inflation through a contractionary monetary policy, the impact has been limited due to lending interest rate caps.
The government’s recent price caps on essential food items have not effectively curbed the rising costs, leading to market chaos.
Both experts and the World Bank stressed the need for immediate policy changes to stabilize import prices and contain inflation.
They called for adjustments in monetary and exchange rate policies to reverse the decline of reserves and address inflationary pressures in the short term.