2020-04-05 18:23:30 BdST

Impact of Covid-19 not reflected in inflation data 


Inflation increased slightly last month, bringing an end to a three-month declining spree, according to a report by the Bangladesh Bureau of Statistics (BBS). 

BBS data shows that point-to-point inflation rose to 5.48 percent in March from 5.46 percent in February. 

However, consumers believe the rising prices of commodities – due to the panic buying frenzy brought on by the coronavirus crisis – has not been reflected in the inflation data.

The price of rice, lentil, cooking oil, and salt have risen due to the Covid-19, along with the prices of other essentials. Large crowds of buyers gather regularly at grocery stores, neighbourhood convenience stores and pharmacies to purchase daily necessities in large quantities.

However, the BBS report on inflation does not reflect this trend.

The price of rice increased in March by Tk3 to Tk4.12 per kilogramme, compared to February. Prices of moogdal (yellow lentil) increased by Tk22 per kilogramme, of red lentil by Tk16.46, and sugar by Tk3.

At the national level, food inflation amounted to 4.87 percent in March, down from 4.97 percent in the previous month. Inflation for non-food products, however, increased to 6.45 percent from 6.23 percent in February.

According to the report, rural areas had 5.47 percent inflation in March, slightly up from 5.44 percent in the previous month. In villages, food prices increased by 5.06 percent, while that of non-food items increased by 6.27 percent in March.

In urban areas, inflation increased to 5.49 percent in March from 5.48 percent in February. Food inflation dropped to 4.44 percent from 4.70 percent, while non-food inflation increased to 6.69 percent from 6.36 percent last month in urban areas.

Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said the prices of several essential commodities had been increasing for the last three months. 

Referring to data by the Trading Corporation of Bangladesh, he said the price of rice, ginger, lentil, soybean oil and some other items increased rapidly between March 16 and March 23, due to a panic buying.

The BBS report does not reflect this, the economist said.

"The price of power has increased, which has a direct impact on consumers, and an indirect impact through increasing the price of other manufacturing goods," Moazzem explained, adding the rate of inflation would be higher if the report included these issues. 

BBS Director (CPI) Mohammad Abdul Kadir Miah said the report had been generated with market information from March 12-18, which is why it does not reflect the panic buying and price hike of commodities.

He also said the statistics bureau had compiled the report before the general holidays began from March 26.

"BBS collects data from 140 markets in several parts of the country, so there is no chance of data manipulation," Kadir said, adding, "However, the report does not include the higher prices of commodities – in the last quarter of March – due to the limits of its methodology."

The BBS calculates a Consumer Price Index every month to find the rate of inflation, which shows the degree of average increase in the cost of living standards over the last year.

The inflation rate of 5.48 percent in March indicates that a commodity which was Tk100 last year will now cost Tk105.48. People would have to buy a lower volume of the commodity if their incomes remained static.

Meanwhile, the BBS report mentioned that wages increased by 6.46 percent in March, compared to the same period of the previous year. 

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