Political turmoil to blame as it disrupts supply chain
Food inflation rose in October on the back of political turmoil that disrupted the supply chain at times.
It stood at 8.38 percent in contrast to 7.93 percent recorded in the month of September, according to data from Bangladesh Bureau of Statistics.
Particularly affected were the urban areas, where food inflation crept up 0.53 percentage points to 9.64 percent in October. In rural areas, it climbed 0.43 percentage points to 7.86 percent, compared to September.
Non-food inflation, however, dropped during the month. In urban areas, it stood at 5.28 percent, down from September’s 6.44 percent. As for rural areas, it was 4.84 percent in October in contrast to 5.59 percent a month ago.
Overall, inflation dropped 0.10 percentage points to 7.03 percent in October.
Golam Mostafa Kamal, director general of BBS, said food inflation increased because of a rise in prices of rice, spices and vegetables. “This is the outcome of repeated shutdowns, which severely disrupted the supply chain.”
On the other hand, non-food inflation dropped as most people completed their spending by the middle of the month, when the two religious festivals of Eid-ul-Azha and Durga Puja took place, according to Abul Kalam Azad, director of BBS.
“Food inflation increased more in urban areas as supply could not reach because of shutdowns. The availability, however, was more in rural areas, because of which the price spiral was not as intense,” said Zahid Hussain, lead economist of World Bank’s Bangladesh operations.
“Non-food inflation dropped as hartals ate into people’s earnings. Also, people could not go out during hartals so the demand dropped. This is my hypothesis,” he added.
Source: The Daily Star