Inflation eased slightly in June, but not enough to bring much-needed relief to consumers from entrenched price hikes of essentials.

The Bangladesh Bureau of Statistics said on Monday that inflation in June was recorded at 9.16 per cent, lower than the 9.42 per cent rate in May, due to reduced inflationary pressure on both food and non-food items.

With this, inflation has stayed above 9 per cent over the past three months.

Economists said that high inflation was reducing people’s purchasing power and pushing up manufacturers’ production costs.

If the trend persists in the coming months, the local currency may come under pressure and face devaluation, warned Masrur Reaz, chairman of the Policy Exchange Bangladesh, a local research organisation.

The BBS calculated that the food inflation rate stood at 8.6 per cent in June, down from 9.06 per cent in May at the national level, while the non-food inflation rate was 9.61 per cent in June, down from 9.71 per cent in May.

It also found higher inflation in rural areas at 9.23 per cent compared with 9.01 per cent in urban areas, mainly due to higher non-food inflation driven by price hikes of fuel oils in June.

The elevated inflation has been felt by already hard-pressed consumers despite the continuation of contractionary monetary policy aimed at keeping interest rates high.

The persistence of high inflation has also been attributed by economists to supply-side constraints that cannot be addressed by contractionary monetary policy alone.

High living costs leave no extra spending capacity for most people, which discourages industrial units from increasing output.

‘The government should enhance market demand,’ said Masrur, adding that maintaining exchange rate stability was also key to checking import-led inflation.

Struggling consumers are relying on savings and borrowings to sustain consumption amid high inflation and slow wage growth, he added.

The BBS update showed that wage rate growth stood at 8.18 per cent in June, compared with 8.21 per cent in May.

The wage rate has been trailing the inflation rate for more than 50 months, which economists say highlights the suffering of the majority of people.

MK Mujeri, executive director of the Institute for Inclusive Finance and Development, a local think tank, said that the phenomenon indicated that the increase in wage rates was not sufficient to keep up with inflation.