DHAKA, March 10 (Reuters) - Bangladesh’s annual inflation rate picked up in February due to surging food costs and price pressures could intensify further on disruption in the supply chain due to political unrest.
Inflation accelerated to 7.87 percent in February from 7.38 percent a month ago, officials of the Bangladesh Bureau of Statistics said on Sunday.
Food prices in February were 8.34 percent higher than a year earlier, up from January’s 7.21 percent. Non-food inflation moderated to 7.12 in February from 7.79 percent the previous month.
“A jump in prices of rice, pulses, flour, fishes and other items pushed food inflation higher,” a senior bureau official said, adding that food prices could climb again due to supply problems over political unrest such as strikes.
Bangladesh has been rocked by a series of nationwide strikes over an ongoing war crimes tribunal over the past few weeks.
February’s reading based on the new series using 2005-06 as a base year was 7.84 percent, up from January’s 6.62 percent.
The government raised oil prices by up to 11.5 percent in January in a bid to trim the subsidy burden, but backtracked on a plan to hike electricity tariffs for now.
Price pressures are a major concern for the government, which faces an election in early 2014.
The central bank cut its key policy rates last month for the first time since 2009, by half a percentage point, on a slower economic growth outlook.
It also cut its growth forecast to 6.4 percent in the current fiscal year ending in June, down from 7.2 percent targeted earlier, as sluggish global demand weighs on exports.
Bangladesh aims to trim inflation to 7.5 percent in the current fiscal year.
Annual inflation in the financial year that ended in June 2012 accelerated to 10.62 percent from 8.80 percent the previous year. Non-food prices were the major contributor as the government, saddled with a huge subsidy bill for oil, raised fuel and power charges several times.
Reporting by Ruma Paul; Editing by Michael Perry