Inflation hits 16-month high in May, rises to 9.42%
According to BBS data, food inflation rose sharply to 9.06% in May from 8.39% in April. Food price growth also exceeded the level recorded a year earlier, when food inflation stood at 8.59% in May 2025.
The country's overall inflation continued its upward trajectory, with point-to-point inflation rising to 9.42% in May from 9.04% in April.
According to the latest data released by the Bangladesh Bureau of Statistics (BBS) on Sunday (7 June), the current inflation rate is also higher than the 9.05% recorded in May last year.
According to the BBS, inflation in May reached its highest level in the past 16 months. Previously, the highest inflation was recorded in January 2025 at 9.94%.
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The monthly statistical update from the state-run bureau shows a broad-based increase in the cost of living, with price pressures intensifying across both food and non-food categories during May.
According to BBS data, food inflation rose sharply to 9.06% in May from 8.39% in April. Food price growth also exceeded the level recorded a year earlier, when food inflation stood at 8.59% in May 2025.
Food inflation in May reached its highest level in the last three months. Earlier, it stood at 9.30% in February.
At the same time, the non-food sector experienced even greater price pressures, with non-food inflation accelerating to 9.71% in May.
This represents a steady increase from 9.57% in April and is also higher than the 9.42% recorded in May last year.
Meanwhile, non-food inflation rose to its highest level in 21 months. The previous peak was 9.74% in August 2024.
'Inflation unlikely to ease'
Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), said that given current economic realities, the risk of inflation continuing its upward trend remains high.
"The impact of higher fuel oil and electricity prices is directly affecting all sectors. When fuel prices rise, transportation costs increase, affecting every stage from production to distribution.
"As a result, the prices of all products, from food items to daily necessities, are increasing," he added.
The InM chief also noted that recent floods have damaged the agricultural sector, particularly vegetable and paddy production. This has disrupted supply chains and further pushed up market prices.
On the demand side, he said increased spending centred around Eid has also contributed to inflationary pressure. Higher remittance inflows, festival bonuses and additional income have increased cash circulation among consumers, leading to greater spending.
As a result, demand has risen faster than supply, further accelerating inflation, he added.
Mustafa said, "Pressure is coming from both demand and supply. Natural disasters, rising fuel prices, higher transportation costs and political-economic uncertainty are all contributing to inflation."
He warned that the pressure is unlikely to ease in the coming months. With the monsoon season approaching, the situation could worsen if new floods or other natural disasters occur.
M Masrur Reaz, chairman and founder of Policy Exchange Bangladesh, said the current sustained upward trend in inflation is highly concerning, though not entirely unexpected.
He said limitations in domestic production, industrial output and supply systems have caused the availability of goods in the market to lag behind demand, creating inflationary pressure.
He added that recent increases in fuel and electricity prices have further complicated the situation. Fuel prices have been adjusted in multiple phases, and the effects began to be felt in the market during April and May.
"When fuel prices increase, production costs, transportation expenses and costs throughout the supply chain rise, ultimately leading to higher inflation at the consumer level," he said.
"This process can be described as 'energy-related inflation compounding', where the impact of higher energy prices gradually spreads across other sectors of the economy. It has a particularly direct effect on production, labour mobility and the transportation of goods."
Wage rate growth
According to the Bangladesh Bureau of Statistics, national wage growth (general, point-to-point) stood at 8.21% in May 2026, slightly up from 8.16% in April and unchanged from 8.21% in May 2025.
Although wages increased, they remained below the inflation rate for the 51st consecutive month.
In May 2026, point-to-point wage growth in the three major sectors – agriculture, industry and services – was 8.22%, 8.15% and 8.36% respectively. In April, the corresponding rates were 8.19%, 8.09% and 8.31%.
Meanwhile, Mustafa K Mujeri said that because wage growth has remained below inflation for a prolonged period, the real incomes of low- and lower-middle-income people are declining.
As a result, their purchasing power continues to erode. He said that unless wages rise in line with inflation, cost-of-living pressures on lower-income groups will continue to intensify.
