DOT Desk: Inflation rose due to the central bank permitting a 28.2% depreciation of the Taka in the 2022 and 2023 calendar years to mitigate foreign exchange reserve losses and restore external balance along with Bangladesh’s reliance on food imports,report Dhaka Tribune.
According to the “World Food and Agriculture Annual Statistical Booklet 2023” by the Food and Agriculture Organization (FAO), Bangladesh holds the third position among food-importing nations, having imported approximately 12.5 million tons of food products from the global market in 2021.
Analyzing the vulnerability of food imports in 2021 alongside the devaluation of the taka over the past two calendar years provides insight into the inflationary impact of imported goods in Bangladesh. On January 2, 2022, the official exchange rate for the US dollar was Tk85.8. Exactly one year later, it increased to Tk104.35, and by December 26, 2023, it had reached Tk110. However, in April 2022, Bangladesh Bank initiated stricter restrictions on the importation of luxury goods and non-essential items, excluding food and other essential commodities. Despite these measures, the fundamental inflationary pressures persisted.
According to the Bangladesh Bureau of Statistics (BBS), food inflation in Bangladesh soared to 12.54% in August 2023, marking the highest level in the past 12 years. This is up 278 basis points from October 2011, when food inflation was 12.82%. In FY23, the Consumer Price Index (CPI) rose 9.02%, the highest average inflation rate in 12 years.