Bangladesh's annual inflation rate climbed to a three-and-a-half-year high in July, fired up by both food and non-food prices, government data shows, and officials said August's rate could be even higher. Inflation accelerated to 10.96 percent in July from 10.17 percent in June, the highest since January 2008 when it hit 11.43 percent, the Bureau of Statistics said on Thursday.
Food inflation in July rose to 13.40 percent from 12.51 percent in June while non-food inflation rose to 6.46 percent from 5.73 percent. Inflation could rise further in August due to Ramazan when food prices traditionally surge, a senior bureau official said. The annual inflation rate in the fiscal year that ended in June accelerated to 8.80 percent from 7.31 percent the previous year, exceeding its upwardly revised target of 8.0 percent on the back of surging food prices.
But non-food inflation has been on the rise since May after the government raised some fuel prices to help to relieve the state firms' hefty subsidy burden. Prices in rural areas rose even faster in July than the national inflation rate, up 11.09 percent from 10.91 percent in June, while in urban areas inflation quickened to 10.65 percent from 8.33 percent.
Persistent inflation prompted the central bank to raise its key interest rates by half a percentage point in June, its third hike since March. The central bank's latest monetary policy statement in July aims to cut credit growth to contain inflation within 7.50 percent as targeted for this fiscal year.
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