Bangladesh’s May consumer prices rise 7.42%, highest in 8 years

Consumer prices in Bangladesh soared to an eight-year high in May, adding to concerns about the mounting inflationary pressures on the economy.

Headline inflation rose to 7.42 percent last month, up from 4.87 percent a year earlier, while the food inflation rate accelerated to 8.3 percent, according to data published by the Bangladesh Bureau of Statistics.

In May 2014, the general and food inflation rates stood at 7.48 percent and 9.09 percent, respectively.

Bangladeshis living in the countryside have had to bear the brunt of inflation in May, as the general inflation rate in rural areas rose to 7.94 percent. Food inflation also climbed sharply to 8.84 percent, marking a 2 percent increase from April, according to the latest data from the national statistical agency.

The general and food inflation rates in urban areas are 6.49 percent and 7.08 percent, respectively.

Prices of food and other commodities have been rising on the international market for the last four months as the Ukraine-Russia war dealt a heavy blow to the global economy, which was still recovering from the pandemic-era sluggishness.

Bangladesh has been no exception and prices of essential items soared in April when the country observed Ramadan.

Little solace can be found from the general non-food inflation data, as it decreased to 6.08 percent from 6.39 percent in April. In rural areas, the rate was 6.26 percent while in cities, it was 5.85 percent.

Md Ziauddin Ahmed, director of the BBS’s National Accounting Wing, said the hike in rice prices affected the inflation data.

“Rice is considered the most precious commodity in the consumer price index basket. So, when rice prices soar, the inflation rate goes up,” he said.

He also indicated that the rising prices of imported food items like cooking oil had an impact on domestically produced food items and drove up prices across the board.

Finance Minister AHM Mustafa Kamal, in his recent national budget proposal, targeted an average inflation rate of 5.6 percent in the coming fiscal year.

While delivering the speech, he said: “The causes of inflation at the global level include, among others, rising inflation among trade partners, rising oil prices, depreciation of the taka against the US dollar, the disruption of the global supply chain and the Russia-Ukraine crisis -- all of which are largely beyond our control,” he said.

Internal factors, such as Bangladesh’s recovery from the pandemic, also played a part, the minister noted.

“The government is committed to containing the rising trend of inflation by addressing inconsistencies between the supply and the demand,” he said.

According to the budget proposal, the government is refraining from adjusting domestic prices of chemical fertiliser, gas and power to stave off inflation.