Inflation hits two-year low

Inflation continued its fall in November, coming down to 6.21 percent—the lowest in 24 months. The inflation rate, which has been showing a downward trend for the last several months, was 6.60 percent in October. In October 2012, inflation was 5.16 percent, which rose to 6.55 percent in November the same year.

Food inflation was the biggest driver behind the drop in overall inflation last month, sliding to 6.44 percent from 7.16 percent in October, according to the Bangladesh Bureau of Statistics (BBS) data.

inflation-hitsNon-food inflation, however, continued to rise. It reached 5.84 percent in November from 5.74 percent in the previous month, due to a rise in house rent, transportation costs, education and medical expenses and other non-food items.

The continuous decline in food prices on the international markets also helped food inflation come down.

Prices of edible oil and petroleum products decreased on the global markets, BBS officials said.

Central bank officials said a recent surge in bank loans was one of the reasons behind the rise in non-food inflation in November.

In October, non-food inflation went up as two major religious festivals took place at the beginning of the month. People’s movement and consumption of non-food items increased ahead of the festivals.

Inflation declined in both urban and rural areas last month. In rural areas, it dropped to 6.05 percent from 6.49 percent in October, and in urban areas to 6.51 percent from 6.79 percent.

The government has set the inflation target at 6.5 percent, on average, for the current fiscal year. On an average basis, inflation was slightly above 7 percent in November.

Planning Minister AHM Mustafa Kamal and BBS officials had earlier said they were hopeful of hitting the inflation target this fiscal year.

– Star Business Report