Bangladesh Inflation Returns Above 9%, Squeezing Middle and Low-Income Households

Inflation in Bangladesh has climbed back above the 9 per cent threshold after nine months, intensifying pressure on middle-class and low-income households as food prices continue to rise.

According to the latest data released on Sunday by the Bangladesh Bureau of Statistics (BBS), overall inflation reached 9.13 per cent in February, marking the highest level in the past ten months. The figure pushes inflation back into the 9 per cent range for the first time since May last year, when it stood at 9.05 per cent.

The latest reading also represents the highest inflation rate since April last year, when the rate reached 9.17 per cent. Economists note that the renewed surge highlights persistent price pressures that have gripped Bangladesh’s economy over the past several years.

Data from the statistics agency show that overall inflation has risen for four consecutive months, reflecting continued volatility in food markets and broader cost pressures across the economy. Analysts warn that the rising trend has further strained household finances, particularly for families with fixed or limited incomes.

Food prices remain the main driver of inflation. In February, food inflation stood at 9.30 per cent, while non-food inflation reached 9.01 per cent. Food inflation has now increased for five consecutive months, indicating persistent supply and distribution challenges in essential commodities.

Bangladesh has faced elevated inflationary pressure for nearly three years. In 2025, average inflation stood at 8.77 per cent, a level economists say has significantly eroded purchasing power and weakened real income growth.

Economists often describe inflation as a form of ‘hidden tax’ on consumers. When prices rise faster than wages, households experience a decline in real income, forcing them to cut spending or rely on borrowing.

For example, if a household spent 100 taka on goods and services in February 2025, the same basket of goods would cost approximately 109.13 taka in February 2026, reflecting the 9.13 per cent inflation rate.

Data from the Bangladesh Bureau of Statistics also show that national wage growth in February stood at 8.06 per cent, lower than the inflation rate. This gap effectively reduces real purchasing power, placing additional financial strain on wage-earning households.

Economists attribute the continued rise in inflation to supply disruptions in food markets, higher transportation costs, and weaknesses in market monitoring.

Ahsan H. Mansur, an economist and professor at the University of Dhaka, said that when wage growth lags behind inflation, the result is a steady erosion of household purchasing power.

‘Lower real income ultimately reduces consumption and can create longer-term challenges for economic stability,’ he noted.

Another economist, AB Mirza Azizul Islam, a former adviser to Bangladesh’s caretaker government, argued that stronger market oversight and improved supply chains remain essential to stabilising prices.

‘Without transparency and effective competition in food markets, controlling inflation will remain difficult,’ he said.

Economists say that tackling inflation will require a combination of effective monetary policy, stronger market regulation and increased domestic production and supply of essential goods.

Unless policymakers succeed in containing price pressures in the coming months, analysts warn that the cost-of-living crisis could deepen further, posing ongoing challenges for millions of Bangladeshi households.