Inflation may fall below 7% by Jun 2026: Bangladesh’s interim govt

The assessment was made at a recent meeting chaired by chief adviser Muhammad Yunus, who reviewed the country’s overall economic performance and budgetary outlook with senior policymakers.

Inflation has already shown signs of easing after a prolonged period of pressure driven by currency weakness, supply disruptions and global price shocks.

Bangladesh’s inflation may drop below 7 per cent by next June amid contractionary monetary policy, fiscal restraint and improving balance across primary economic indicators, the government feels.
Inflation has already shown signs of easing after a prolonged period of pressure.
The government believes if inflation continues to fall while wage growth remains steady, purchasing power could recover further.

Tighter monetary conditions and fiscal discipline were beginning to yield results, with policymakers expressing confidence that inflation would continue to moderate over the coming months, domestic media outlets reported citing the minutes of the meeting.

Based on a 12-month average, overall inflation fell below 9 per cent in November this year for the first time since June 2023.

Point-to-point inflation had crossed the 9-per cent threshold in March 2023, peaking at 9.33 per cent.

However, it dropped below 9 per cent again in June 2025 and declined further to 8.29 per cent in November 2025.

One of the most politically sensitive issues discussed was the long-standing gap between inflation and wage growth, which has eroded real incomes in recent years. For much of the past decade, rising prices have outpaced wage increases, leaving households poorer despite nominal income gains.

The government believes that if inflation continues to fall while wage growth remains steady, purchasing power could recover further during the current fiscal.

The meeting was informed about a marked improvement in Bangladesh’s external position. As of December 18, gross foreign exchange reserves stood at $32.57 billion—up sharply from about $25 billion in August 2024.

The increase was attributed to a more stable exchange rate, stronger remittance inflows and higher interest rates in the domestic financial sector, which have helped curb capital flight and encourage formal inflows. Reserves are expected to rise further in the coming months.

The current account, which had recorded persistent deficits from fiscal 2016-17 to fiscal 2023-24, has also shown signs of stabilisation.

Remittance inflows have been bright. Import growth has also revived after prolonged restrictions imposed to conserve foreign exchange.

Fibre2Fashion News Desk (DS)