Despite increased spending on rice import, the country’s general inflation rate decreased significantly to 5.02 per cent in January 2021, the lowest in eight years.
The experts opined that the government’s move to import food grains including rice helped keep food price under control and contain the inflation rate at 5.02 per cent, experts have said.Economist and former adviser of a caretaker government Dr ABM Mirza Azizul Islam on Saturday told the Daily Sun that the government’s move for rice import discouraged local traders to hike food price.
Besides, people’s consumption and demand have also decreased during the coronavirus pandemic, which also helped keep inflation stable despite a deficit in rice production, Mirza Aziz added.
Bangladesh Bank (BB) monthly economic updated of February 2021 showed that 12 months average general inflation decreased to 5.64 per cent in January 2021 --- 0.24 percentage point higher than the target of 5.40 per cent for FY21.
The point to point basis inflation of food item decreased to 5.23 per cent in January 2021 from 5.34 per cent in December 2020, while non-food inflation decreased to 4.69 per cent in January 2021 from 5.21 per cent in December 2020.
As a result, Point to point general inflation decreased significantly to 5.02 per cent in January 2021.
The inflation report prepared by BB and Bangladesh Bureau of Statistic (BBS) showed point to point basis inflation on food was 5.70 per cent in July of FY21, 6.08 per cent in August, in September 6.50 per cent, in October 7.34 per cent, in November 5.73 per cent, in December 5.34 per cent, in January 5.23 per cent in FY21.The point to point general inflation rate was 5.53 per cent in FY 21, 5.68 per cent in August, 5.97 per cent in September, 6.44 per cent in October, 5.52 per cent in November, 5.29 per cent in December and 5.02 per cent in January FY21.
Khondaker Golam Moazzem, research director of Centre for Policy Dialogue (CPD), explaining the inflation and food price said, “The demand and consumption have decreased due to people’s income loss during the pandemic, the demand will increase in the following months with a rise in income.”
This will push up food price and then it will be challenging to continue the flexible inflation rate on food grains, he said.
Golam Moazzem also suggested cautionary measure including enhancing monitoring for food supply ahead of Holy Ramadan to control food price, which will help to keep the inflation rate stable.