Inflation falls to 8.26pc in August, but real incomes still under pressure

Inflation in Bangladesh eased slightly in August, with the average increase in prices of goods and services falling to 8.26 per cent. However, wage growth remained below the inflation rate, indicating that the decline in inflation has yet to bring significant relief to people’s real incomes.

The Bangladesh Bureau of Statistics (BBS) revealed the figures in its Consumer Price Index (CPI) report released on Monday.

According to the BBS, overall inflation stood at 8.32 per cent in July, meaning it declined by 0.06 percentage points in August. However, inflation was 8.29 per cent in August last year, indicating a marginal 0.03 percentage-point decline year-on-year.

The easing was mainly driven by lower food prices. Food inflation fell to 7.02 per cent in August from 7.16 per cent in July and 7.60 per cent in August last year.

In contrast, non-food inflation increased to 9.32 per cent in August from 9.28 per cent in July. It was 8.90 per cent in August last year, showing that price pressures in non-food items and services have intensified over the year.

Inflation varied slightly between rural and urban areas. In rural areas, overall inflation stood at 8.31 per cent in August, down from 8.36 per cent in July. Rural food inflation was 7.01 per cent, while non-food inflation rose to 9.59 per cent.

In urban areas, overall inflation declined to 8.20 per cent from 8.24 per cent in July. Urban food inflation was 7.04 per cent, while non-food inflation stood at 8.97 per cent.

Meanwhile, wage growth also slowed in August. The BBS said the point-to-point growth in the national Wage Rate Index was 8.05 per cent, down from 8.22 per cent in July and 8.15 per cent in August last year.
As wage growth remained below inflation, the pressure on people’s real purchasing power persisted despite the slight easing in inflation.