Although Eid month, August sees inflation slump

Inflation in August came down to 5.49 percent from 5.62 percent during the same time last year, according to the monthly update of Bangladesh Bureau of Statistics (BBS).

Usually, prices of different items, including food, go up in line with the increasing demand during Eid every year. To meet the additional cost during the festival, expatriates sent home $716 million in remittance in the first nine days of August.

However, experts expressed scepticism over the BBS information that said prices of food and non-food items declined, instead of rising for extra consumption in the month.

During Eid-ul-Adha, people buy cows and goats more than clothes. But the price index indicates to a much low weight in case of meat, said Dr Mustafa K Mujeri, former director general of Bangladesh Institute of Development Studies.

Besides, the weight of spices and other food items in the consumer index was also comparatively low. Moreover, as gas prices rose recently, the inflation was supposed to be even higher, he added.

Dr Towfiqul Islam Khan, senior research fellow at private research organisation Centre for Policy Dialogue, told The Business Standard that the study should have incorporated issues like impacts of gas price hike.

Apart from that, house rent, transport fare and health costs also rose in this time, he said, suggesting strengthening of the BBS inflation measurement system to obtain the real picture of living costs of citizens.

Meanwhile, the BBS unveiled the monthly update report of the consumer market on Tuesday.

Planning Minister MA Mannan officially rolled out the report at the National Economic Council at Sher-e-Bangla Nagar.

“The market stabilised as impacts of rain and flood reduced in August. As prices of different items also came down after Eid-ul-Adha, inflation did not increase in comparison,” said the minister.

BBS Director General Dr Krishna Gayen said, “BBS usually monitors the market from 13th to 18th of each month. As Eid-Ul-Adha was celebrated before this period (August 12), it did not impact the data.”

According to the BBS update, inflation on food items fell 15 basis points to 5.27 percent compared to that in July.

Also, prices of non-food items declined 67 basis points to 5.27 percent during the same period.

In rural areas, the inflation rate in August was 5.34 percent, which was 5.02 percent in urban areas, up from 5.49 percent and 5.88 percent respectively in July.

The BBS prepares separate inflation indices for food and non-food items for rural and urban areas.

The inflation at 5.49 percent on point-to-point means that living cost has increased at this rate in one year.

For example, if a product would cost Tk100 last year, it will cost Tk105.49 this year.

But, consumers will have to spend Tk100 to buy products worth Tk94.51, if their income does not increase.

However, the BBS informed that the wage index in the last one year increased at 6.43 percent.