Oct. 17 (Bloomberg) -- Inflation in Bangladesh accelerated to the fastest pace in nearly 13 years on higher food costs, adding pressure on the central bank to raise interest rates.
Consumer prices rose 11.97 percent in September from a year earlier, after gaining 11.29 percent the previous month, the Bangladesh Bureau of Statistics said in a statement today. Food inflation quickened to 13.8 percent in September from 12.7 percent in the previous month. Prices have jumped the most since December 1998, according to data compiled by Bloomberg.
Accelerating inflation could stymie the government’s plan to boost economic growth to a record 8 percent in the South Asian nation and erode incomes in a country where the Asian Development Bank estimates more than half of the 166 million people live on less than $1.25 a day.
Bangladesh’s central bank has raised interest rates five times in 13 months to tame the inflation rate, which is the highest in Asia after Vietnam. Prime Minister Sheikh Hasina aims to slow consumer-price increases to 7.5 percent in the financial year ending June 30 from 8.8 percent a year earlier.
The central bank, which has raised interest rates by 275 basis points since August last year, said on July 27 it plans to persist with a policy of restraining credit growth in the current fiscal year even as meeting the government’s inflation goal may be challenging.
Bangladesh plans to import 600,000 metric tons of wheat in the next nine months for various state-run welfare programs, Badrul Hasan, director for procurement at the Directorate General of Food, said on Sept 16. Global food prices rose 16 percent in September from a year earlier, according to the United Nations’ Food and Agriculture Organization.
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