The poor of Bangladesh are increasingly facing food price hikes: Rice, wheat, pulses and cooking oil have gone up as wages have failed to rise in line with inflation.
A recently released Bangladesh Bank Annual Report for the July 2006 - June 2007 fiscal year said wage rates increased by only 4.5 percent compared to 9.8 percent the previous year.
Wage rate increases in the manufacturing, agricultural, fisheries and construction sectors stayed below the consumer price inflation rate of 7.2 percent during this period.
And with the price of food essentials increasing by as much as 27 percent over the past four months alone, experts are concerned.
Manufacturing sector wages increased by 4.3 percent compared to 10.7 percent the previous year, the report said.
The agriculture sector, which employs most of the country's workforce, registered an increase of 4.44 percent in wage rates against 11.12 percent the previous year.
According to 2005 official data, nearly 40 percent of Bangladesh's over 150 million inhabitants live on US$1 or less per person per day.
Cyclone, flood impact
The average inflation rate for 2008 has been projected to fall within the 8.1-8.5 percent range.
Economic prospects in the short and medium terms are likely to be affected by last year’s monsoon floods and the cyclone in November, especially in the first half of 2008, the report warned.
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 Cyclone victims face sharply rising food prices |
| Rice crop hit by recent cyclone |
| Flood victims face rising food prices |
Immediately after the floods, Cyclone Sidr struck the southwest of the country on 15 November, killing over 3,000 and rendering millions more homeless. Crops on a further 2.47 million hectares of land were destroyed.
The bank’s annual report identified a number of risks for the country's economy in 2008, including rising inflation, high international oil prices, and political developments in the run-up to general elections due by October 2008.
A major challenge for policymakers was to contain inflation, as low inflation is imperative to accelerate economic growth and poverty reduction, the report said.
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