Inflation eased in Bangladesh during July-September, but wage growth continued to trail consumer prices, eroding household purchasing power.
Wages rose approximately 7.9 per cent year on year in September, against inflation of 8.3 per cent, a gap of 0.4 percentage points, according to Bangladesh Bank’s “Inflation Dynamics in Bangladesh: July-September 2026” report, released on Thursday.
Average inflation declined to 8.31 per cent in July-September, the first quarter of FY2026-27, from 9.21 per cent in April-June, as food and underlying price pressures eased. Fuel inflation, however, accelerated.
The decline meant prices were rising more slowly, not falling. Bangladesh Bank said inflation had outpaced wage growth for the past two years, reducing real incomes, or earnings adjusted for inflation.
The wage-inflation gap narrowed in July-September compared with the preceding quarter but widened slightly towards September as wage growth slowed while inflation showed little further improvement.
Wage growth also weakened marginally across all administrative divisions compared with April-June, although Dhaka recorded the highest rate.
Food inflation eases, fuel pressure grows
Food inflation fell to 7.13 per cent in July-September from 8.68 per cent in April-June, mainly because vegetables, rice and wheat-based products contributed less to price increases.
Protein-rich foods, including milk, fish, meat, eggs and pulses, remained the biggest contributors, accounting for 51.1 per cent of food inflation.
Vegetables’ contribution declined to 29.2 per cent from 37 per cent, while that of rice and wheat-based products also fell significantly.
The composition of overall inflation shifted towards fuel and core inflation, which excludes volatile food and fuel prices.
Core inflation’s contribution to headline inflation increased to 48.04 per cent from 45.86 per cent, while food’s share declined to 38.51 per cent from 42.30 per cent. Fuel’s contribution rose to 13.44 per cent from 11.85 per cent.
The core inflation rate itself eased to 7.93 per cent from 8.40 per cent, reflecting smaller contributions from transport and communication services, healthcare and personal care.
Fuel inflation, meanwhile, rose to 17.4 per cent from 17 per cent, partly driven by solid fuels such as firewood, agricultural by-products, cow dung and jute sticks. These products have a combined weight of 3.59 in the consumer price index.
Bangladesh Bank said fuel price increases towards the end of September had yet to be reflected in consumer price data published by the Bangladesh Bureau of Statistics (BBS).
Imported products also contributed more to headline inflation. Their combined share rose to 27 per cent in July-September from 24.9 per cent in April–June, while that of domestically produced goods fell to 73 per cent from 75.1 per cent.
Within domestic products, food’s contribution declined while that of non-food goods increased.
Most essentials become costlier
Average wholesale and retail prices of most essential commodities monitored by Bangladesh Bank increased in July–September compared with April-June.
Green chillies and onions recorded particularly sharp increases, while farm eggs and potatoes also became more expensive. In July, green chilli prices and the gap between wholesale and retail prices rose significantly.
Prices of medium-quality rice and soybean oil remained broadly stable, while Sonali chicken became significantly cheaper.
Wholesale–retail price gaps widened for Sonali chicken, medium-quality rice, lentils, onions and potatoes, but narrowed for farm eggs and soybean oil.
Of the 382 products tracked in the BBS consumer price index, 203 became more expensive in September compared with August, 25 became cheaper and 154 were unchanged.
Thus, prices rose for 53.1 per cent of monitored items. Among 126 food products, 62 recorded increases, fewer than in August.
Bangladesh Bank’s inflation diffusion indices, which measure how widely price increases are spread across products, declined across headline, food and non-food categories in July-September compared with April-June.
This indicated that price increases had become less widespread, although more than half the monitored items still became costlier in September.
The central bank also noted that headline, food and non-food inflation had declined in FY2025-26 compared with FY2024-25.
Inflation remained within a relatively narrow range during July-September 2026, but Bangladesh Bank cautioned that three months of data were insufficient to establish the trend for the full financial year.
The central bank called for continued policy vigilance to contain inflation expectations, ease persistent price pressures, and protect household purchasing power.
