Inflation remains above 9% for third straight month

Highlights:

• June inflation eased to 9.16% from 9.42% in May
• Inflation stayed above 9% for third consecutive month
• June inflation exceeded 8.48% recorded a year earlier
• Food inflation fell to 8.60% from 9.06%
• Non-food inflation declined to 9.61% from 9.71%
• Twelve-month average inflation dropped to 8.68%

Inflation fell slightly in June but still remained above 9%, extending a three-month streak of elevated price pressures.

According to the latest data released by the Bangladesh Bureau of Statistics (BBS) today (6 July), point-to-point inflation at the national level stood at 9.16% in June, down from 9.42% in May. In preceding two months, i.e in March and April, the rate stood at 8.71% and 9.02% respectively. 

In June last year, the rate was 8.48%.

Although the revised budget for FY2025-26 targeted average inflation at 7%, the goal was not achieved.

According to BBS, the 12-month moving average inflation for the period from July 2025 to June 2026 stood at 8.68%, down from 10.03% during the corresponding period from July 2024 to June 2025.

The BBS report shows that both food and non-food inflation declined in June. Food inflation fell to 8.60% in June from 9.06% in May, while non-food inflation eased to 9.61% from 9.71%.

Food inflation was 7.39% in June 2025, rising to 8.60% over the past year. During the same period, non-food inflation increased from 9.37% to 9.61%.

Explaining the slight decline in June inflation, Dr Mustafa K Mujeri, Executive Director of the Institute for Inclusive Finance and Development (InM), said the fall could largely be attributed to seasonal factors.

"First, the modest decline in inflation in June can largely be regarded as a seasonal effect. At this time of the year, supply generally improves, particularly for food items. As a result, market pressures ease somewhat and inflation temporarily declines. Therefore, it is reasonable to explain the decline in both food and non-food inflation primarily by seasonal factors," he said.

However, he cautioned that the decline should not be interpreted as a lasting shift.

"For most of the current fiscal year, inflation has remained persistently high and has not declined significantly. Overall, it has followed either an upward or consistently elevated trend, clearly indicating that the government has failed to achieve its inflation target," he added.

Mujeri said that despite the slight decline, inflation remained at an uncomfortably high level.

"Although inflation has eased somewhat, it is still too high to provide any real relief. The cost of living remains under considerable pressure because the current rate is still well above a desirable or tolerable level."

He stressed that effective measures were urgently needed to bring inflation under control.

"It will not be enough to rely solely on the central bank's monetary policy. Although the policy interest rate has been maintained at 10%, stronger coordination is needed through supply-side management, fiscal policy and market supervision. A comprehensive and robust policy response will be essential if the government is to achieve its target of bringing inflation down to 7.5%."

Mujeri also noted that fuel prices had contributed to inflationary pressures.

"Although the fuel sector has stabilised somewhat and prices have been adjusted in line with the market, the full impact has not yet been reflected in the economy. The effects of higher fuel prices usually take time to filter through, so they may become more evident in the coming months."

Professor Dr Sayema Haque Bidisha of the Economics Department at the University of Dhaka said June's modest decline should not be interpreted as a significant improvement.

"While it is a positive sign, it would be premature to describe it as a lasting trend. We need to observe the situation over the next one or two months to determine whether this is merely a temporary fluctuation or the beginning of a sustained decline. If inflation continues to fall consistently, that would certainly be encouraging."

Rural inflation falls to 9.23%

Inflation in rural areas also eased slightly in June, although it remained elevated.

According to BBS, point-to-point inflation in rural Bangladesh fell to 9.23% in June from 9.48% in May.

Food inflation in rural areas declined to 8.52% from 8.95%, while non-food inflation stood at 9.98%, virtually unchanged from the previous month.

Urban inflation declines to 9.01%

Inflation in urban areas also remained high in June despite a slight decline.

The BBS report showed that point-to-point inflation in urban areas fell to 9.01% in June from 9.25% in May.

Urban food inflation declined to 8.76% from 9.29%, while non-food inflation eased to 9.16% from 9.24%.

Wage growth continues to lag inflation

At the national level, point-to-point wage growth stood at 8.18% in June, down slightly from 8.21% in May.

According to BBS, wage growth has remained below the inflation rate for 52 consecutive months.