Inflation eases in May, helped by falling food prices
Inflation slowed to 6.19 percent in May, which is close to the government's annualised target for the fiscal year, due to a decline in food prices.
The trend in prices reversed after accelerating to 6.32 percent, a six-month high, in April from 6.27 percent in the previous month.
Food inflation stood at 6.23 percent last month, down from April's 6.48 percent.
“Our inflation went down partly because of the fall in prices of rice, edible oil and oil in the international markets,” Planning Minister AHM Mustafa Kamal said while disclosing the figures to reporters at the National Economic Council auditorium.
The low inflation in India as well as in the international markets and the stable exchange rate contributed to the fall.
“Our inflation is directly linked to Indian inflation as we import a lot of food items such as rice and lentil from the country,” Kamal said.
Non-food inflation however went up a bit: it was 6.14 percent in May from 6.08 percent in April.
“Non-food inflation goes up and down because luxury items are part of non-food items,” said Kaniz Fatema, secretary of the Statistics and Information Division.
The government is very close to reaching its inflation target of 6.5 percent in the current fiscal year. Average annualised inflation stood at 6.42 percent by the end of May.
“Our persistent efforts helped contain inflation at a tolerable limit,” Finance Minister AMA Muhith said in his budget speech a week ago.
Supported by lower fuel prices in the international market, supportive fiscal and monetary policies, satisfactory agricultural production and improved distribution system, food and non-food inflation will likely remain within the target by the end of the fiscal year, he said.
Muhith said inflation is expected to slide further down in fiscal 2015-16, reflecting the fall in international oil prices, favourable agricultural production, continued improvement in domestic distribution system and impact of restrained monetary policy.
The government has set the inflation target of 6.2 percent for the next fiscal year.
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