Average inflation up, marginally, in 2019

The average inflation rate has increased by 0.04 percentage points for the 12 months in the just-concluded year 2019 to 5.59 per cent due to some volatility in commodity markets in the country, official figures show.

According to the Bangladesh Bureau of Statistics (BBS) data unveiled on Tuesday, the average inflation rate was 5.59 per cent in 2019 as against 5.55 per cent for the previous calendar year 2018.

For the current fiscal year (FY), 2019-20, the government has projected the inflation rate at 5.50 per cent.

Meanwhile, the point-to-point inflation rate dropped to 5.75 per cent in December from 6.05 per cent in November 2019, the BBS data show. The figure for December 2018 was 5.35 per cent.

Planning minister MA Manna disclosed the data after a meeting of the Executive Committee of the National Economic Council (ECNEC) in the city on Tuesday.

Since prices of some commodities, including vegetables and onion, fell last month, compared to those of the previous month, the inflationary trend in the country was downward, he said.

Contacted for comments, former lead economist of World Bank Dr Zahid Hussain termed 2019 a 'year of higher inflation'.

"The inflation rates for each of the months in the last calendar year ,maintained an uptrend except for the month of December. The month-on-month inflation rate was also higher than the government's target of 5.55 per cent for the current FY 2020," he told the FE.

"But I am puzzled about the government data showing higher inflation in the last calendar year amid bumper rice production, higher gross domestic productivity, poor private sector credit growth and the lower broad money growth compared to the nominal GDP growth," Dr Hussain said.

He also said the inflation could only be boosted if there are some demand-pull and cost-push factors in the economy.

According to the BBS data, the food inflation in December across the country on point-to-point basis dropped slightly by 0.53 percentage points to 5.88 per cent from 6.41 per cent in the previous month.

However, the non-food inflation rate increased by 0.08 percentage points to 5.55 per cent in December from 5.47 per cent in the previous month, the BBS data showed.

In rural areas, the point-to-point inflation rate in the last month fell to 5.76 per cent from 6.01 per cent in November.

In villages, the food inflation was recorded at 6.12 per cent in December, down from 6.54 per cent in November.

The non-food inflation, however, increased to 5.07 per cent in December in rural Bangladesh from 4.99 per cent in November.

According to the BBS data, the inflation rate in urban areas dropped to 5.73 per cent in December from 6.12 per cent in November.

The food inflation rate in urban areas was recorded at 5.34 per cent in December, down from 6.11 per cent in November.

However, the non-food inflation rate in urban areas increased in December to 6.19 per cent from 6.13 per cent in the previous month.

The BBS also unveiled the wage rate index (WRI) on Tuesday.

It showed that the WRI rose to 6.54 per cent in December from 6.42 per cent in November.

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