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Rising global energy costs and heightened tensions in the Middle East are creating fresh risks for inflation in Bangladesh, while exports are coming under pressure, according to the April economic update by the General Economics Division (GED) of the Planning Commission.
The GED warned that increasing global fuel prices, higher import costs and exchange rate pressures are driving up production and supply chain expenses, which could push inflation upward again. Ongoing geopolitical tensions in the Middle East are adding further uncertainty.
According to the report, overall inflation eased to 8.71% in March 2026, down from 9.13% in February, largely due to a decline in food prices. Food inflation dropped to 8.24% in March from 9.30% a month earlier. In contrast, non-food inflation remained elevated at 9.09%.
The report attributed the easing in food inflation mainly to a fall in rice prices, supported by fresh Boro harvest supplies, imports and open market sales. However, prices of meat, fish and vegetables remain high.
Wage growth continues to lag behind inflation, keeping real incomes under pressure. Although wage growth rose to 8.09% in March, it remains below the inflation rate.
In the financial sector, deposit growth in the banking system has continued, but government borrowing has surged. Credit growth to the public sector reached 29.61% in February, the highest in recent times. Meanwhile, revenue collection remains significantly below target. In March, the National Board of Revenue (NBR) had a revised target of Tk53,290 crore, but actual collection stood at Tk33,521 crore.
Development spending has also slowed. Implementation of the Annual Development Programme (ADP) declined during the July–March period, with both expenditure and utilisation rates falling in March. Delays in project execution, financing constraints and administrative bottlenecks were cited as key reasons.
The external sector shows mixed trends. Remittance inflows have increased significantly, helping stabilise foreign exchange reserves. Earnings from expatriates rose steadily from January to March, while reserves remained at a relatively comfortable level, providing a buffer amid global uncertainty.
However, export performance has weakened notably. Export growth declined throughout the first quarter of 2026 and turned negative at 18.07% in March. Lower global demand and rising production costs are contributing to the slowdown.
Import trends present a mixed picture. While imports of consumer and intermediate goods remain stable, imports of capital machinery have declined, signalling caution in investment sentiment.
Although the exchange rate appears relatively stable, the real effective exchange rate indicates a continued depreciation of the taka. While this may enhance export competitiveness, it also raises the risk of higher import costs.
