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Bangladeshi inflation soars amid political instability

Xinhua, March 11, 2015 Adjust font size:

Bangladesh's inflation leaped to 6. 14 percent in February due to soaring food costs amid political instability the country has suffered since January, official figures showed Wednesday.

According to data released by Bangladesh Bureau of Statistics ( BBS), the inflation rate went up from January's 6.04 percent to 6. 14 percent in February.

The data showed that the country's food prices grew 6.11 percent in February from 6.07 percent in January.

A senior BBS official said food inflation soared last month due to "political instability" which has heavily disrupted transportation across the country.

Bangladesh has been witnessing blockades and general strikes enforced by opposition parties since January 6.

Non-food items inflation, however, increased to 6.20 percent in February from 6.01 percent in January, the data showed.

Price hike of food items, particularly staple rice is a key concern for Bangladeshi government as nearly 31 percent of about 153 million people live on less than two U.S. dollars a day and spend a large part of their income on food purchase.

According to Bangladesh Bank's Monetary Policy for the second half of the current fiscal year ending June 2015, the persisting inflationary pressures over the past few months with the risks ahead related to the inflation outlook imply that achieving the 2014-15 fiscal year inflation target will be challenging.

The central bank governor Atiur Rahman had earlier blamed the renewed political unrest for the Customer Price Index to have remained above the targeted ceiling.

Bangladeshi opposition parties have been observing a nonstop blockade across the country since Jan. 6, demanding fresh elections under a non-party caretaker government system.

"A resurgence of political unrest could depress private investment, push up inflation and put reserves under pressure," said Zahid Hossain, lead economist of the World Bank's Dhaka office.

Bangladesh Bank's inflation target is set at 6.5 percent for the current fiscal year 2014-15 (July 2014-June 2015). Endi