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The Bangladesh Bank has expressed concern that the ongoing high inflation in the country may rise further. In particular, recent increases in fuel prices are expected to push up the cost of essential goods even more.
According to Bangladesh Bank’s latest report titled “Inflation Dynamics in Bangladesh (January–March 2026)”, inflationary pressures may intensify in the near future. The report identifies several key drivers behind this trend, including high global oil prices, domestic fuel price adjustments, and existing supply shortages.
The government recently raised fuel prices in response to rising petroleum costs in the international market. The central bank’s analysis came just nine days after that decision, indicating additional cost pressures on the economy.
Economists and relevant officials say that higher fuel prices lead to increased transportation costs, which in turn raise production expenses. As a result, the impact spreads across every level of the supply chain and ultimately increases prices for consumers, making inflation more difficult to control.
According to Bangladesh Bank data, overall inflation (based on year-on-year prices and wages) rose to an average of 8.8 percent in the third quarter (January–March) of fiscal year 2025–26, up from 8.3 percent in the previous quarter.
Md. Ejazul Islam, Director General of the Bangladesh Institute of Bank Management, said, “The increase in fuel prices may create a short-term shock to inflation, although it could ease somewhat over time.” He added, “Fuel is an input used across nearly all sectors, so a rise in its price affects the entire economy and contributes to higher overall inflation.”
A senior official of Bangladesh Bank noted that transportation costs have already increased following the fuel price hike, creating fresh pressure on inflation. Inflation in the fuel sector rose to 14.9 percent in the third quarter of fiscal year 2025–26, compared to 14.4 percent in the previous quarter.
Meanwhile, food inflation also increased slightly during the same period, particularly due to higher prices of vegetables and spices. However, protein-rich foods such as meat, fish, and eggs remained the primary contributors to food inflation.
Bangladesh Bank also noted that seasonal demand surrounding Eid al-Fitr led to higher prices for food items, clothing, and footwear. During this period, consumer spending typically rises, putting additional pressure on the market.
The report further states that the contribution of both imported and locally produced food items to inflation has increased compared to earlier periods, while the contribution from imported non-food items has slightly declined.
Although the gap between wage growth and inflation has narrowed somewhat, real income for the general population has not increased significantly. In March, inflation slightly declined to 8.7 percent, while wage growth stood at 8.1 percent, resulting in a modest decrease in purchasing power.
Bangladesh Bank believes that careful policy measures are essential to keep inflation under control. At the same time, reducing price pressures on food and other essential goods and maintaining the purchasing power of the general population are equally important. According to the central bank, such measures can help create a stable macroeconomic environment, which is crucial for ensuring sustainable and inclusive economic growth in the long term.
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