Inflation has taken a dangerous shape in the country. From the very beginning of the year 2011, inflation has continued rising and has crossed the double-digit mark. Inflation continues its upward trend even after crossing the mark. The rate of inflation is higher in the food sector than in the non-food sector. Despite that, the non-food sector is not lagging behind in the rate of increase. Within the span of one year, inflation in the sector increased by seven times. Side by side with the prices of food items, house rent, transport cost, and expenditure on clothing and shoes have also increased. As a result, the people are passing their days amid hardship. Additional money is going out of their pockets, but income is not increasing.
Point-to-Point Basis
At present, the rate of inflation in the rural and urban areas has skyrocketed. The food price inflation in the urban areas is higher than that in the rural areas. As a result, the urban people are spending more money for purchasing food.
According to the latest statistics of the Bangladesh Bureau of Statistics (BBS), in August the inflation at national level was recorded at 11.29 percent on a point-to-point basis. This is the highest in the past three years. The inflation in July 2010 was recorded at 10.96 percent.
BBS sources said the national food price inflation in August 2011 was 12.7 percent. The inflation in the nonfood sector during the same period was 8.76 percent. The inflation in the rural areas in August 2011 was at 12.59 percent on a point-to-point basis (comparison with the same month of previous year). However, it was at 12.94 percent in the urban areas. As per this account, one has to spend 112.94 taka for a particular quantity of food in August this year against 100 taka spent for same the quantity of food in August 2010.
The interesting aspect of the inflation this time is that the inflation has increased manifold in the nonfood sector. The BBS says the nonfood sector inflation in August 2010 was 3.76 percent. The same in August of the current year has stood at 8.76 percent. The inflation in this sector within a span of one year has been increased by three times. The non-food sector inflation, both in the rural and urban areas, has increased at an alarming rate.
Causes of Rising
Why is non-food sector inflation rising side by side with the food sector? In this regard, economists said a rise in the food price always increases the prices of other goods. When expenditure increases on purchasing food items, the prices of other goods are also raised in a race with that. When the price of food increases, it also pushes up the house rent. Side by side with that, the prices of shoes and other goods will also be increased. As a result, the prices of non-food items will rise at an abnormal rate.
The BBS statistics are a proof of this. The BBS statistics shows that in August 2010 the inflation in the garment and shoe sector was recorded at only 1.14 percent. In August 2011, the same was recorded at 7 percent. Inflation increased by seven times in the span of only one year. Similarly, inflation in fuel and lighting in August 2010 was recorded at 0.3 percent in the last year. The same stood at 2.51 percent in August 2011.
Prices of Food in Rural Areas
Meanwhile, the country's economists are considering as a dangerous event the gradual rise in inflation. They said it was thought that the price of food will be reduced after harvesting the new paddy. However, in practice, this did not happen. Instead the price of food was increased.
The upward trend in inflation indicates that the prices of food in the rural areas have not decreased. A kilogram of rice is now being sold at a price close to 40 taka. The rural people spend more than 60 percent of their income on food. With the rise in inflation they are now spending a large chunk of money on procuring foods. It is quite evident that they passing days amid misery.
Existing Social Safety Net
Under the above circumstances, the economists said the government will have to supply food to the rural poor at a subsidized price. They said it will be wise on the part of the government to expand the existing social safety net. They said a rationing system can be launched in the rural areas to overcome the crisis. The government will have to introduce a rationing system in the urban areas also particularity for the garment industry labors with immediate effect, as food price inflation in the cities has surpassed 12 percent.
Meanwhile, the state-run trading corporation the Trading Corporation of Bangladesh (TCB), in its routine market analysis said the price of rice in the country has increased by 15 percent in a span of one year. Similarly, the prices of edible oil increased by 42 percent, onions by 57 percent, and sugar by 23 percent.
Point-to-Point Basis
At present, the rate of inflation in the rural and urban areas has skyrocketed. The food price inflation in the urban areas is higher than that in the rural areas. As a result, the urban people are spending more money for purchasing food.
According to the latest statistics of the Bangladesh Bureau of Statistics (BBS), in August the inflation at national level was recorded at 11.29 percent on a point-to-point basis. This is the highest in the past three years. The inflation in July 2010 was recorded at 10.96 percent.
BBS sources said the national food price inflation in August 2011 was 12.7 percent. The inflation in the nonfood sector during the same period was 8.76 percent. The inflation in the rural areas in August 2011 was at 12.59 percent on a point-to-point basis (comparison with the same month of previous year). However, it was at 12.94 percent in the urban areas. As per this account, one has to spend 112.94 taka for a particular quantity of food in August this year against 100 taka spent for same the quantity of food in August 2010.
The interesting aspect of the inflation this time is that the inflation has increased manifold in the nonfood sector. The BBS says the nonfood sector inflation in August 2010 was 3.76 percent. The same in August of the current year has stood at 8.76 percent. The inflation in this sector within a span of one year has been increased by three times. The non-food sector inflation, both in the rural and urban areas, has increased at an alarming rate.
Causes of Rising
Why is non-food sector inflation rising side by side with the food sector? In this regard, economists said a rise in the food price always increases the prices of other goods. When expenditure increases on purchasing food items, the prices of other goods are also raised in a race with that. When the price of food increases, it also pushes up the house rent. Side by side with that, the prices of shoes and other goods will also be increased. As a result, the prices of non-food items will rise at an abnormal rate.
The BBS statistics are a proof of this. The BBS statistics shows that in August 2010 the inflation in the garment and shoe sector was recorded at only 1.14 percent. In August 2011, the same was recorded at 7 percent. Inflation increased by seven times in the span of only one year. Similarly, inflation in fuel and lighting in August 2010 was recorded at 0.3 percent in the last year. The same stood at 2.51 percent in August 2011.
Prices of Food in Rural Areas
Meanwhile, the country's economists are considering as a dangerous event the gradual rise in inflation. They said it was thought that the price of food will be reduced after harvesting the new paddy. However, in practice, this did not happen. Instead the price of food was increased.
The upward trend in inflation indicates that the prices of food in the rural areas have not decreased. A kilogram of rice is now being sold at a price close to 40 taka. The rural people spend more than 60 percent of their income on food. With the rise in inflation they are now spending a large chunk of money on procuring foods. It is quite evident that they passing days amid misery.
Existing Social Safety Net
Under the above circumstances, the economists said the government will have to supply food to the rural poor at a subsidized price. They said it will be wise on the part of the government to expand the existing social safety net. They said a rationing system can be launched in the rural areas to overcome the crisis. The government will have to introduce a rationing system in the urban areas also particularity for the garment industry labors with immediate effect, as food price inflation in the cities has surpassed 12 percent.
Meanwhile, the state-run trading corporation the Trading Corporation of Bangladesh (TCB), in its routine market analysis said the price of rice in the country has increased by 15 percent in a span of one year. Similarly, the prices of edible oil increased by 42 percent, onions by 57 percent, and sugar by 23 percent.
No comments:
Post a Comment