Dhaka adopts 5.2% inflation target for 2022-23
The Bangladesh government has adopted an inflation target of 5.2% for the 2022-23 fiscal, a move which seems to be in line with its focus on boosting growth while keeping prices in control.
The inflation target for the current financial year is 5.4%, while its 5.3% for the next fiscal. And according to official documents accessed by UNB, the inflation target for 2022-23 has been set at 5.2%. Economists believe that inflation needs to be subdued for achieving sustainable long-term growth in any developing country.
In fact, as per the official documents, the inflation in the past five years has been stable and below 6%.
According to Bangladesh Bureau of Statistics data, the average annual inflation was 5.65% in the 2019-2020 fiscal, while it was 5.48% in the previous financial year. Similarly, the average annual inflation was 5.78% in FY 2017-18, 5.44% in 2016-17, 5.9% in 2015-16 and 6.4% in 2014-15.
Similarly, the 12-month average inflation in May 2020 was 5.6%. Last May, it was 5.5%. Likewise, the point-to-point basis inflation was 5.4% in May 2020 while it had been 5.5% in the same period last year.
Point-to-point food inflation stood at 5.1% in May 2020, indicating a slight slump from November 2019, according to the document. While Covid-19 may try to push food prices high for a few more months, the document says, the inflation could be negated by satisfactory agricultural production.
According to the BBS data, the average annual food and non-food inflation between July 2019 and June 2020 stood at 5.56% and 5.85%, respectively. The point-to-point inflation in June 2020 rose to 6.02% from 5.35% in May mainly due to the coronavirus outbreak-induced price hike of essential food items.
The point-to-point food inflation increased to 6.54% in June from that of 5.09% a month ago. On the other hand, the non-food inflation declined to 5.22% in the same month from 5.75% in May.
In June, the general, food and non-food inflation in the urban areas stood at 6.03%, 7.72 % and 5.27%, respectively, which were 4.81%, 3.94% and 5.79%, respectively, in the previous month.
The overall, food and non-food inflation in the rural areas stood at 6.02%, 6.47% and 5.18%, respectively, in June. In May, the general, food and non-food inflation in rural areas was 5.65%, 5.61% and 5.73%, respectively.
According to the BBS data, the national wage index rate slightly increased to 5.90% in June from 5.89% in May as a result of increasing wages in all three sectors — agriculture, industry and services.
The data shows that the wage index rate for agriculture increased to 6.18% in the same month from 6.16% in May. The wage index rates for industry and services also rose to 5.31% and 5.78%, respectively, in June from 5.29% and 5.75%, a month before.