Bangladesh’s inflation modestly eased to 8.27 percent in October from 8.34 percent in September, as slower food price increases offset mounting pressure from non-food items, official data showed on Monday.
The marginal improvement, however, offers little relief to households as non-food inflation continued to rise and wage growth fell further behind the overall rate of inflation, eroding people’s purchasing power.
According to the Bangladesh Bureau of Statistics (BBS), food inflation declined to 6.40 percent in October from 7.22 percent in September. In contrast, non-food inflation climbed to 9.89 percent from 9.30 percent over the same period.
The latest figures come despite a Tk20-per-litre increase in the prices of diesel, petrol and octane on September 21, which raised transportation costs and added to pressure on the prices of essential commodities.
Prices of vegetables, fish and meat have remained high in markets, even though the overall inflation rate declined in October.
The fall in inflation does not mean that commodity prices have come down. Rather, prices continued to rise, but at a slightly slower pace than before.
Meanwhile, the gap between inflation and wage growth widened further, putting additional pressure on household budgets.
The national wage growth rate declined to 7.63 percent in October from 7.90 percent in September, according to BBS data. This means wages increased at a slower pace than consumer prices, reducing workers’ real purchasing power.
When wage growth fails to keep pace with inflation, low- and middle-income households have to spend a larger share of their earnings on basic necessities, often forcing them to borrow or cut spending on food, clothing and transportation.
Inflation had remained above 9 percent for three consecutive months before easing in July and August. It edged up again in September before declining slightly in October.
The impact of fuel price increases on inflation has been a concern because higher transport costs generally feed into the prices of goods and services. In August 2022, a sharp increase in fuel prices was followed by a surge in inflation, which crossed 9.5 percent.
At the time, diesel and kerosene prices were raised from Tk80 to Tk114 per litre, while petrol and octane prices were increased to Tk130 and Tk135 respectively.
The October figures suggest that the latest fuel price increase has yet to translate into a rise in the headline inflation rate, although non-food inflation continues to reflect persistent price pressures.