Inflation in Bangladesh, Recent price hike & its causes and effects on general people

Recent facts

Recent time during fiscal year [2007-2008] the price of the goods and services increase beyond the capabilities of the poor people. The point-to-point inflation climbed down below the double digit compared to that in July and August. The point-to-point inflation reached 10.10 points in July for the first time in the last two decades and went up further to 10.11 points in August this year.

Point-to-point inflation soared to its record high of 10.10 per cent in July and inched up by 0.01 per cent in a month, Bangladesh Bureau of Statistics data showed.

Economists and a consumer rights activist said unabated price hike of food items led to the double-digit growth of inflation and called for urgent steps to give consumers a respite from skyrocketing prices and restore business confidence.

However, the provisional data prepared by the Bangladesh Bureau of Statistics (BBS) and sent to the planning ministry showed that food inflation has dropped in both rural and urban areas.

Year	Inflation rate (consumer prices)	Rank	Percent Change	Date of Information
2003	3.10 %	117		2002 est.
2004	5.60 %	67	80.65 %	2003 est.
2005	6.00 %	160	7.14 %	2004 est.
2006	7.00 %	160	16.67 %	2005 est.
2007	7.20 %	163	2.86 %	2006 est.

The main problem is that the prices increase of daily commodity and essential food items such as rice, powder milk, soybean oil and grains and vegetables. The prices of the shopping goods are moderate in terms of daily convenient goods.

Overall inflation rate continues to increase with a 0.85 percentage point increase in April compared to the rate in March. 0.45 and 1.59 percentage points increase inflation rate of food and non-food items.

Inflation rate	Rural	Urban
Food	8.79	9.44
Non-food	7.83	6.09

Many economists raise there cautionary about price increase, “The country’s economy would head for a state of stagflation if the government fails to cool off some heat and check erosion in business confidence” economist Atiur Rahman cautioned.

Official statistical agency’s figures show annualized average inflation kept on creeping up steadily from as low as 1.66 per cent in 2000-01 fiscal year to 7.1 per cent in 2006-07; The rate was 3.58 in 2001-02 and continued to go up since then, with 5.03 in 2002-2003, 5.64 in 2003-04, 7.35 in 2004-05 and 7.54 in 2005-06, according to the economic survey of the finance ministry.

The jump was more galloping in point-to-point counts this year, from 5.94 per cent in January to 10.11 in August.