DHAKA: Bangladesh's annual inflation rate climbed to 11.97 percent in September, the highest level in 20 years, fuelled by soaring food prices, a government statistics official said on Sunday.
Food inflation jumped to 13.75 percent in September from 12.70 percent in August, while non-food inflation edged up to 8.77 percent from 8.76 percent, the official at the Bangladesh Bureau of Statistics said.
Price pressures are major concern for the government as more than a third of the country's 160 million people live on less than $1.25 a day.
Inflation in urban areas rose even faster than the national average, hitting 12.29 percent in September on a 14.67 percent surge in food prices and 9 percent advance in non-food prices.
Inflation in rural areas hit 11.85 percent, with a 13.35 percent rise in food prices and a 8.69 percent rise in non-food prices.
Food prices have rocketed in recent months -- despite plentiful stocks at government inventories and record crops -- with analysts blaming inefficient markets and hoarding.
The government raised oil and gas prices in September for the second time since May to help to relieve state firms' hefty subsidy burden, a move that added more impetus to already high inflation.
The government is under pressure from global lending agencies such as the IMF to raise its heavily subsidised fuel and power prices even more, but more cuts in subsidies would add to public fury over the spiralling cost of living.
The local currency unit, the taka , has continued to fall against the US dollar, further fanning inflation and import costs.
The central bank said in its latest monetary policy statement in July that it aims to cut credit growth to keep inflation within 7.50 percent as targeted for this fiscal year through June 2012. Economic growth is targeted at 7 percent.
Persistent inflation prompted the central bank to raise its key interest rates by half a percentage point in September, its fourth hike since March, following an earlier reserve increase and a 1 percentage point rise in official rates in August 2010.
Like other central banks in the region, Bangladesh Bank is in a tough spot with a buoyant domestic economy and inflation escalating, while global growth prospects are dim.
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