January 3, 2018 / 11:17 AM / 15 days ago

UPDATE 1-Bangladesh December inflation eases to 5.83 pct y/y

(Adds details)

DHAKA, Jan 3 (Reuters) - Bangladesh’s annual inflation rate in December eased to 5.83 percent from 5.91 percent the previous month, the statistics bureau said on Wednesday, as prices of non-food items rose at a slower pace.

Annual inflation in October climbed to a 2-year high of 6.04 percent on the back of surging food prices.

Food prices in December were 7.13 percent higher than a year earlier, and higher than November’s 7.09 percent.

In contrast, non-food inflation moderated to 3.85 percent in December from 4.10 percent the previous month.

Food inflation has accelerated mainly due to a surge in the price of rice, the staple for the population of 160 million. Higher prices of meat, pulses, milk and other items also contributed.

The government has started bulk rice imports for the first time since 2011 to combat record prices after floods hit domestic output amid dwindling state reserves.

In August, Bangladesh cut a duty on rice imports for the second time in two months. But domestic prices hardly moved, posing a problem for the government, which faces a general election this year.

The central bank left key interest rates unchanged in July, saying it was trying to balance economic growth and inflation risks.

Inflation eased to 5.44 percent in the financial year that ended in June, as non-food prices rose at a slower pace but food prices climbed to a two-year high. (Reporting by Ruma Paul)

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