Consumer prices fell to 7.48 percent in July from a nine-year peak of 7.56 percent in the previous month, as declining commodity prices eased inflationary pressure in the first month of the new fiscal year.
The last time inflation had rocketed past that level was July 2013, when it stood at 7.95 percent, according to the Bangladesh Bureau of Statistics.
The inflation is, however, 2.12 percentage points higher than in July 2021, when inflation stood at 5.36 percent.
This year’s budget had set an average inflation target of 5.6 percent for the fiscal year.
The decline in consumer prices was notable and served as proof that Bangladesh’s economy was not in a state similar to that of crisis-hit Sri Lanka, Planning Minister MA Mannan said at a media conference on Wednesday.
“Inflation is an important economic indicator. It is a reflection of the entire economy and serves as a representation of its condition. It influences the economy," Mannan said.
“People from lower income groups bear a greater burden from inflation,” he said. “The government must think of the people. When the lives of lower income people are affected, it is a serious issue indeed.”
Though the drop might seem minimal, it is notable in the current climate, the minister said.
It is an indication that inflationary pressures have lost some of their sting and will decline further, he said.
Mannan said that one reason for this change was the export of food grains from Ukraine.
“Ships are already departing Ukraine and we will see the benefits. The price of food products has also fallen on the international market and that will trickle down as well.”
The minister believes inflation will ease further in August. “I’m no statistician, but I believe there are signs of a decline on the way.”
Referring to the conflicting higher inflationary rates calculated by private research organisations, Mannan said: “The BBS calculates inflation based on a basket of 422 products, which include items useful to the people of the country.”
“These organisations’ calculations focused on consumer goods that were more relevant to lower income groups – such as food – which led to higher inflation rates. But we don’t calculate the overall inflation rate based on food prices alone."