Inflation slightly drops to 9.92% in Sep – but food inflation still in double digits

Though the country's overall inflation has slightly decreased in September, dropping from double digits to single digit, it still remains high, with food inflation still above 10%.

According to data from the Bangladesh Bureau of Statistics published today, inflation dropped to 9.92% in September from 10.49% in August as food inflation fell to 10.4% in September from 11.35%, while non-food inflation dropped to 9.5% from 9.74%.

Since March last year, general inflation has been above 9%, and in July, the month marked by quota reform movement leading to blockades and curfews, it soared to a record high of 11.66%. 

Infographic: TBS

Although inflation eased slightly in the following month, dropping by 1.17 percentage points and marking the largest decline since 2013, it still remained above 10%. Moreover, food inflation has remained above 10% since April this year.

Talking to The Business Standard on the issue, Policy Exchange Bangladesh Chairman Masrur Reaz said, "Although inflation slightly declined in September, it remains high, hovering close to 10%. People are still struggling due to inflation." 

"There were three measures that the central bank could have taken to control inflation, and they acted on two of them, which is a positive step. The first one was that they increased interest rates, and raised the policy rate to 9%, which was a major step," he said.

"The second was that they stopped printing money. The previous government's tendency to print money over the past two years contributed to the high inflation rate. To control inflation, it is essential to refrain from printing more money," he added.

"The third and final measure would be ensuring a sufficient supply of commodity raw materials and intermediate goods. Improvement in our supply chain is crucial; otherwise, inflation cannot be fully controlled," said Masrur Reaz.

Meanwhile, according to BBS, overall inflation in rural areas is still above 10%. 

In September, rural inflation stood at 10.15%, compared to 10.95% in August. Rural food inflation was recorded at 10.38%, down from 11.44% in August. On the other hand, non-food inflation in rural areas dropped from 10.45% in August to 9.91% in September.

Urban areas experienced lower inflation rates with general inflation in September standing at 9.83%, down from 10.01% in the previous month. 

However, non-food inflation in urban areas rose slightly, reaching 9.38% from 9.20%, while food inflation decreased to 10.50% from 11.24% in August.

The BBS also reported that the national wage growth rate in September was 8.01%, slightly up from 7.96% in August. However, wage growth has remained below inflation for the past 32 months.