September inflation edges up to 8.34% as wage growth slows further

Bangladesh's headline inflation rose to 8.34% in September 2026, up from 8.26% in August, according to data the Bangladesh Bureau of Statistics (BBS) released today (7 October).

The month-on-month increase was 0.08 percentage points.

Food inflation also rose in September to 7.22%, up from 7.02% in August, a rise of 0.20 percentage points.

Infographics: TBS

However, food inflation remained below the rate recorded a year earlier. It stood at 7.64% in September 2025, 0.42 percentage points higher than this September's rate.

Non-food inflation edged down to 9.30% in September from 9.32% in August, declining by 0.02 percentage points. However, it remained above the 8.98% recorded in September 2025.

Inflation trend raises concerns

Zahid Hussain, former lead economist at the World Bank's Dhaka office, told TBS that the rise in inflation was not particularly large, but he cautioned against judging the situation solely by the magnitude of the increase.

"The baseline is already high. At the same time, the downward trend in inflation over the past few months was very weak. That trend has now reversed," he said.

He said an assessment of inflation should consider not only the overall rate but also its breadth, including the goods and services experiencing price increases.

Zahid said the overall non-food figure presents a somewhat misleading picture.

A detailed breakdown of non-food inflation shows that, except for household furnishings and miscellaneous items, inflation increased in almost every category. This means that despite the nearly unchanged overall non-food rate, price pressures persist in healthcare, education, and several other categories.

The economist said inflation had increased most sharply in the energy category, apparently reflecting the impact of higher electricity prices.

"Supply-side cost pressures are also becoming important in the reversal of the current inflation trend. Electricity prices and input costs in the production sector are putting pressure on inflation," he said.

Infographics: TBS

Wage growth falls behind inflation

Zahid said nominal wage growth had also slowed during the same period. Wage growth declined across all four major production sectors – agriculture, industry, construction and services.

"In other words, nominal wage growth has slowed as inflation has risen. This means real wages, or people's actual purchasing power, are declining even faster," he said.

The combination of rising inflation and slower nominal wage growth is putting additional pressure on real wages, adversely affecting household incomes and purchasing power.

He said the latest figures were consistent with and lent further support to the World Bank's recent projection of rising poverty.

Warning against premature monetary easing

Zahid said the latest inflation figures carried a warning for policymakers, particularly as Bangladesh Bank had recently cut its policy rate.

"Some people had argued that inflation had declined and that the policy rate should therefore be reduced to boost growth. But the latest inflation data suggest that greater caution is needed," he said.

Inflation has yet to come under control, he said, warning against rushing to lower the policy rate. He also cautioned against easing monetary policy merely to increase credit flows through refinancing or other channels.

Zahid said the month-on-month inflation figures were also sending a warning signal. If the monthly inflation trend continued at its current pace, there was a risk that inflation could reach double digits.

"The key message now is that inflation must be kept under control and action must be taken before the situation deteriorates further," he said.

He noted that in many countries, such circumstances would prompt calls for an increase in policy rates. Bangladesh, too, needs to remain cautious about monetary easing in light of the current inflation trend.

Wage growth slows for 56th consecutive month below inflation

Bangladesh's national wage growth slowed to 7.90% in September 2026 on a point-to-point basis, down from 8.05% in August and 8.02% in September 2025, according to the latest BBS Wage Rate Index data.

Wage growth has remained below inflation for 56 consecutive months.

The data show that wage growth declined across all three major sectors – agriculture, industry and services – in September compared with the previous month.

In agriculture, wage growth stood at 7.89% in September, down from 8.07% in August and 8.13% in September 2025.

In industry, wage growth fell to 7.86% in September from 7.97% in August, although it remained slightly above the 7.83% recorded a year earlier.

In services, wage growth declined to 8.07% in September from 8.25% in August and 8.22% in September 2025.