Bangladesh food

Bangladesh records highest general food inflation in 8 years in May

In May 2014, the general and food inflation rates were 7.48% and 9.09% respectively. The general inflation rate was 4.87% in May last year.

Bangladeshis living in the countryside had to endure the most intense heat of inflation in May, as general inflation in rural areas rose to 7.94% and food inflation to 8.84%, according to the latest data from the national statistics agency.

General and food inflation rates in urban areas are 6.49% and 7.08% respectively.

Prices for food and other basic commodities have risen on the world market over the past four months as the war between Ukraine and Russia has hit the global economy hard, still recovering from the sluggishness of the era of the pandemic.

Bangladesh was no exception and food prices soared in April as the country observed Ramadan. Prices for soybean oil, vegetables, fruits and many other products rose during the month.

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

Md Ziauddin Ahmed, director of the national accounts wing of the BBS, said the rise in rice prices had affected inflation data.

“Rice is considered the most valuable product in the consumer price index basket. So when rice prices skyrocket, the rate of inflation increases,” he said.

He also said that rising prices of imported foodstuffs like cooking oil had an impact on domestically produced foodstuffs and that overall prices had skyrocketed.

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

During his speech, he said: “The causes of inflation globally include, among others, rising inflation among trading partners, rising oil prices, depreciation of the taka against the dollar US, global supply chain disruption and the Russia-Ukraine crisis, which is largely beyond our control,” he said.

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

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

According to the budget proposal, the government refrains from adjusting the domestic prices of chemical fertilizers, gas and electricity to avoid inflation.