January 3, 2017 / 9:52 AM / 9 months ago

Bangladesh inflation cools for second straight month in December

A vendor sorts vegetables next to a railway track as a train passes by, in Dhaka September 10, 2012. REUTERS/Andrew Biraj/Files

DHAKA (Reuters) - Bangladesh’s inflation rate eased for the second straight month in December, the planning minister said on Tuesday, as prices of food and other items rose at a slower pace.

Consumer prices in December rose 5.03 percent from a year earlier, slowing from an increase of 5.38 percent the previous month, Mustafa Kamal told a news conference.

In October, consumer prices climbed 5.7 percent from a year earlier, driven by an increase in food prices.

Annual food inflation in December inched lower to 5.38 percent from 5.41 percent the previous month, while non-food inflation dropped to 4.49 percent from 5.33 percent.

Average inflation was 5.92 percent in the 2015-16 financial year that ended in June, the lowest in 12 years, largely due to a sharp drop in global commodity prices and good agricultural output in the South Asian country of 160 million people.

The government aims to hold inflation at 5.80 percent this financial year.

In January 2016, the central bank cut its key interest rate by half a percentage point for the first time in nearly three years as easing inflation gave it room to help spur economic growth.

Reporting by Ruma Paul; Editing by Sunil Nair and Richard Borsuk

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