Overall inflation declined in January, but food prices remain in double-digits
Published : 04 Feb 2025, 10:56 PM
Bangladesh's overall inflation has dropped to single digits for the first time in four months, while food inflation has also eased but remains in double digits.
According to updated data from the Bangladesh Bureau of Statistics, or BBS, published on Tuesday, inflation stood at 9.94 percent in January.
This means that a product or service that cost Tk 100 in January 2024 required Tk 109.94 to purchase in January 2025.
Although inflation slightly dropped in December compared with November, Bangladesh ended 2024 with double-digit inflation.
In January, the rate declined further, but it remains higher than the previous year's January level.
In January 2024, the inflation rate was 9.86 percent.
The main factors behind the overall inflation decline are the availability of winter vegetables and the downward trend in food inflation.
Food inflation dropped to 10.72 percent in January, down from 12.92 percent in December.
However, non-food inflation saw a slight increase.
It stood at 9.32 percent in January, compared with 9.26 percent in December.
HIGHER INFLATION IN RURAL AREAS
Inflation in rural areas remained higher than in urban areas.
In January, rural inflation stood at 10.18 percent, down from 11.09 percent in December.
In urban areas, overall inflation dropped from 10.84 percent in December to 9.89 percent in January.
After taking office, Chief Advisor Muhammad Yunus announced measures to control inflation.
Interest rates have been raised multiple times to curb the money supply, but essential commodity prices have yet to see significant relief.
Despite this, Economic Advisor Salehuddin Ahmed expects the government's measures to bring inflation down by May.
Speaking after a meeting of the advisory committee on economic affairs and public procurement on Tuesday, Salehuddin said: “A major plan will be taken during Ramadan, and its impact will be visible in April-May.
"By June, we may see an ‘ideal situation’ with inflation dropping to 6-7 percent. In March, specific actions will be taken, particularly focusing on the financial sector.”
SEASONAL IMPACT ON INFLATION
Zahid Hussain, former lead economist at the World Bank’s Dhaka office, attributed the inflation drop to seasonal factors.
He told bdnews24.com: “The supply of winter vegetables has brought prices within reach, and seasonal effects have played a role in reducing inflation.
"However, inflation is about price levels decreasing, and prices had already risen earlier. Rice prices, for instance, have not dropped, so the expected decline in inflation this winter was not as significant as anticipated," he said.
Due to various factors, inflation had surged to 11.66 percent in July of the current fiscal year, before easing to 10.49 percent in August.
In September, it dropped further to 9.92 percent.
However, in October, inflation jumped by 2.07 percentage points to 10.87 percent.
The following month, it rose another 0.51 percentage points, further straining low-income households.