As inflationary pressure slightly eased during the April–June quarter of the current fiscal year, the gap between wages and commodity prices narrowed. According to the latest report from the Bangladesh Bank, this marginally increased the purchasing power of low-income groups, but real income still remains in the negative.
The Bangladesh Bank’s report titled "Inflation Dynamics in Bangladesh” states that the average inflation rate during the final quarter (April–June) of the 2024–25 fiscal year stood at 8.9 percent.
Although slightly down, it remains at an uncomfortable level. During the same period, the wage growth rate was 8.2 percent — indicating that income is still lagging behind expenditure, even if the gap has shrunk somewhat.
According to the Bangladesh Bureau of Statistics’ (BBS) Wage Rate Index (WRI), average real wage growth in June remained negative — continuing a trend that has persisted for 41 consecutive months. In June, the wage growth rate was 8.18 percent, while inflation stood at 8.48 percent, meaning wages fell behind inflation by 0.30 percentage points.
A similar trend was seen in May. Across 63 professions in agriculture, industry, and services, wage growth averaged 8.21 percent — 0.84 percentage points lower than the inflation rate for that period.
The report further notes that food inflation, which remained in double digits during the first half of the fiscal year, gradually declined to 7.4 percent by June. The price hikes of essentials like rice and wheat were the major drivers of food inflation during this quarter, accounting for 43.7 percent of the pressure — the highest recent contribution.
On the other hand, non-food inflation was relatively higher, averaging 9.5 percent in the quarter. Among these, prices of clothing, footwear, and household fuel saw the sharpest increases.
The Bangladesh Bank’s analysis notes that core inflation — calculated by excluding food and energy prices — stood at 49.7 percent, which is 2 percentage points higher than the previous quarter. This indicates that while food prices eased, other sectors remained under pressure.
In the fourth quarter, the contribution of food to overall inflation decreased to 41.3 percent, down from 45.3 percent in the previous quarter. The energy sector’s contribution remained roughly the same, averaging about 9 percent in both quarters.
The contribution of perishable goods to inflation dropped slightly to 30.8 percent from 33.2 percent, thanks to lower prices of vegetables and fish. In contrast, the contribution of non-perishable goods rose to 50.8 percent, up from 50 percent. Inflation in the service sector also edged up, increasing from 16.8 percent to 18.4 percent.
On a month-to-month basis, inflation rose by 0.6 percent in June, whereas it had declined by 0.3 percent in May. Food inflation rose by 1 percent in June after a negative 1 percent in May. However, monthly non-food inflation remained positive at 0.3 percent in both months.
This analysis from Bangladesh Bank comes at a time when international agencies are forecasting a gradual decline in inflation in the coming days. The Asian Development Bank (ADB), in its April 2025 report, estimated that average inflation in Bangladesh for FY 2024–25 could be around 10 percent. However, favorable weather conditions, falling global commodity prices, and strict policies could help ease inflation in the following fiscal year.
The International Monetary Fund (IMF), in its World Economic Outlook report, stated that while global inflation is expected to decline slower than anticipated, low-income and developing countries may see a slightly faster decline.
According to the IMF’s forecast, average inflation in Bangladesh may remain close to 10 percent in 2025, gradually declining to around 5 percent in subsequent years.