Inflation in Bangladesh climbed 45 basis points to 9.86 percent in January, official figures showed yesterday, defying measures undertaken by the central bank recently to bring consumer prices under control.

The Consumer Price Index rose 9.41 percent in December, according to the Bangladesh Bureau of Statistics (BBS).

Non-food inflation pushed up inflation last month: it surged 90 basis points to 9.42 percent.

Food inflation fell slightly to 9.56 percent from 9.58 percent.

The higher inflation highlights the continuing cost-of-living crisis facing the poor and low-income groups.  

Inflation has stayed over 9 percent since March and at an elevated level since May 2022, owing to the lingering impacts of the coronavirus pandemic and the Russia-Ukraine war.

Globally, central banks pushed their interest rates speedily and sufficiently – many to record highs -- to make loans expensive, thus bringing inflation largely under control. But the BB acted in a cautious manner and insufficiently.

The central bank visibly got down to work in June last year when it raised the policy rate to a record high, scrapped the lending rate cap of 9 percent, and put in place a new interest rate-setting mechanism.

Since inflation showed no signs of cooling, the central bank announced an array of measures in the middle of January.

The central bank raised the benchmark policy rate by 25 basis points to 8 percent to raise the cost of funds. This was the eighth straight spike since the tightening cycle began in May 2022.

It also lowered the private sector credit growth target.

All these measures are aimed at bringing down inflation to 7.5 percent by the end of the current fiscal year.

Analysts described the measures as inadequate. 

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, said the supply situation has not improved and the prices of basic items have remained at an elevated level.

"The items that have been seen import duty cuts have also witnessed a spike in prices. There is supply shortage and imports are also lower."

Mansur thinks the central bank's measures are yet to have an impact. "It will take time."