Bangladesh’s food inflation rises to 10.22% in April

Although general inflation slowed slightly to 9.74 percent in April from 9.81 percent a month earlier, food inflation increased to 10.22 percent from 9.87 percent.

Food inflation was even lower in February – 9.44 percent.

Non-food inflation last month fell to 9.34 percent from 9.64 percent in March, according to data published by the Bangladesh Bureau of Statistics on Monday.

Rural people suffered more because of price hikes in April with general inflation growing at 9.92 percent, up from 9.68 percent in March.

The rate decreased to 9.46 percent from 9.94 percent in the urban areas.

Amid soaring prices, general inflation hit an 11-year high of 9.94 percent in May 2023, and continued to be a headache for policymakers. The central bank has since adopted various measures to tighten the supply of money in a bid to rein in inflation.

It raised the key policy rate by 50 basis points to 8.50 percent in line with its contractionary monetary policy on May 8, making borrowing costlier for banks.

Additional tightening of monetary policy should help alleviate any inflationary pressures resulting from the exchange rate reform, the International Monetary Fund observed the same day as it struck a staff-level agreement with Bangladesh for the third tranche of a $4.7 billion loan programme.

It said inflation is projected to remain elevated at approximately 9.4 percent year-on-year in FY24 but is anticipated to decline to around 7.2 percent in FY25, on the back of the continued tighter policy mix and projected lower global food and commodity prices.

“Larger-than-expected spillovers from tightening of global financial conditions, and still elevated international commodity and food prices, coupled with domestic vulnerabilities, has led to persistently high inflation and declining foreign exchange reserves,” said IMF economist Chris Papageorgiou.