January sees resurgence in inflation following December dip

TBS Illustration

The overall inflation again saw a spike in January reaching 9.86% following a drop in December last year, according to the Bangladesh Bureau of Statistics (BBS) data released today.

In December, the overall inflation stood at 9.41%, marking an eight-month low. The inflation rate has consistently remained above 9% since March last year, with November registering at 9.49%.

Latest BBS data showed food inflation eased slightly in January, but non-food inflation rose sharply. Non-food inflation rose to 9.42% in January from 8.52% in the previous month. On the other hand, food inflation decreased to 9.56% in January, which was 9.58% in the previous month.

Mustafa K. Mujeri, executive director at the Institute for Inclusive Finance and Development (InM), told The Business Standard, "The rise in prices across all products, including imported goods, can be attributed primarily to factors such as escalating global transportation costs and the dollar crisis. Moreover, there have also been increases in various services and rent. This collective effect has been the primary driver behind the inflationary surge."

According to BBS data, inflation has increased in both rural and urban areas. Inflation in the city rose to 9.99% in January. The rate was 9.15% in the previous month. Rural inflation rose to 9.70% in January from 9.49% in the previous month.

According to the BBS report, the wage rate also rose to 7.77% in January, from 7.74% in the previous month.

The wage growth has remained below the inflation rate for the past 24 months.

According to economists, disruptions in the Red Sea have led to a surge in freight charges, thereby increasing transportation costs and impacting inflation.