Inflation beat the government target last fiscal year, going up 0.81 percentage point beyond the ceiling.
On an average, the inflation rate was 7.31 percent in fiscal year 2009-10 although the government wanted to keep it within 6.5 percent. The rate was 6.68 percent in 2008-09.
Bangladesh Bureau of Statistics (BBS) has finalised the last fiscal year's inflation and sent a report to the agencies concerned including the finance ministry yesterday.
According to the BBS statistics, food inflation increased but non-food inflation went down last year.
Food inflation was 8.53 percent last fiscal year, up from 8.36 percent in the previous year, while the last year's non-food inflation was 5.45 percent, down from the previous year's 5.91 percent.
On a point-to-point basis, inflation went up 0.05 percentage point in June to stand at 8.70 percent. Non-food inflation fell but food inflation increased in the month compared to May.
In the recent times, on an average basis the inflation rise was the highest at 9.94 percent in FY2007-08. After that the rate started to decrease but since July 2009 inflation increased every month except one or two months.
A Bangladesh Bank (BB) official said inflation is on the rise in other countries also. The prices of food and non-food items are increasing globally, he added.
The official also said although food production increased in Bangladesh, due to the global price hike, especially in India, the prices in the local market could not be brought down.
The monetary policy statement of the central bank released in July said: "The current high double-digit inflation in immediate neighbour India remains a concern, influencing prices in Bangladesh through formal and informal trade."
The BB official also said a huge amount of remittance -- around $11 billion -- flowed into the country last fiscal year. Also, agriculture credit disbursement was more than Tk 1,100 crore, and private sector credit growth was 24 percent last year, 10 percentage points more than the previous year's.
These types of credit had an impact on consumer spending and fuelled inflation, he added.
The central bank has taken a number of steps to contain inflation. Cash reserve requirement was increased in May, and the repo and reverse repo rates were hiked in August, to rein in monetary growth.
The government also took different measures to keep the prices of commodities stable, and expects the inflation rate will not exceed 6.5 percent this fiscal year.
Source: thedailystar.net
