Point-to-point inflation rate fell to 8.48% in June, down from 9.05% in May
Inflation in Bangladesh has dropped below 9% for the first time in 27 months, according to latest data from the Bangladesh Bureau of Statistics (BBS) released today (7 July).
In June 2025, the point-to-point inflation rate fell to 8.48%, down from 9.05% in May. The inflation rate had remained above the 9% mark since March 2023.
During the past 27 months, the highest recorded inflation was 11.66% in July 2024.
According to BBS data, food inflation fell to 7.39% in June this year, from 8.59% in May. Besides, non-food inflation declined slightly to 9.37% in June, from 9.42% in May.
However, the government’s target of keeping average inflation at 6.5% FY25 was not achieved. According to BBS calculations, the average inflation rate from July 2024 to June 2025 was 10.03%.
Zahid Hussain, former lead economist of the World Bank’s Dhaka office, called the year-on-year decline in both food and non-food inflation “good news”. However, he cautioned that the month-on-month picture presents a different reality.
“Prices in June were actually 0.57% higher than in May,” he said. “In food, the month-on-month increase was 0.95%, and for non-food items, it was 0.27%. This trend is visible across most commodity groups.”
For instance, clothing and footwear prices rose 0.12%, housing and utilities climbed 0.29%, and household equipment saw a 0.15% rise. Only the transport category recorded a decline.
The economist warned that although the year-on-year data signals improvement, it is premature to declare victory over inflation. “The month-on-month rise shows that inflationary pressure persists. Had prices dropped from May to June, the picture would have been more reassuring,” he said.
He pointed to three key factors behind the fall in annual inflation: stable weather conditions that supported agricultural output, a relatively steady exchange rate with the US dollar, and a shift towards contractionary monetary policy under the new central bank leadership.
“The recent months of April, May, and June have seen consistent easing of inflation, suggesting that tight monetary policy is finally taking effect,” he said.
“Transmission was weak before the interest rate cap was lifted last October,” added Zahid.
Improved market monitoring also helped. “Previously, we’d see periodic spikes in essentials like onions or green chillies. That didn’t happen in the past few months under the new government,” he said.
Still, challenges remain. Wage growth slowed slightly to 8.18% in June, compared to 8.21% in May. This means wages have remained below inflation for 41 consecutive months.
According to BBS data, rural inflation fell to 8.46% in June, down from 9.05% in May, while urban inflation dropped to 8.94% from 9.50% over the same period.
Zahid said the battle against inflation is far from over. “Inflation is still far from the central bank’s 5 to 6% target. The upcoming monetary policy must stay firm – there’s no room for complacency.”
Source: The Business Standard
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