A tightfisted policy stance on the monetary front and supply bounties pay off as Bangladesh saw 12-month average inflation rate for the just-concluded financial year fall significantly to 8.68 per cent from preceding double-digit level.
The rate dropped from 10.03 per cent in the previous fiscal year of 2024-25, latest official data show.
However, the average inflation was yet 1.68-percentage-point higher than the government's budgetary target of 7.0 per cent.
The annual average downturn coincided with a drop in point-to-point headline inflation rate, which cooled to 9.16 per cent in June 2026 from 9.42 per cent in May, latest consumer price index (CPI) data released by Bangladesh Bureau of Statistics (BBS) show.
The deceleration in headline inflation at the close of the fiscal year 2025-26 was primarily driven by stabilisation in the domestic food-supply chain and broader monetary controls. Slower growth in food costs served as the primary driver for the June relief, analysts say.
According to the BBS statistics, the point-to-point national food-inflation rate fell by 46 basis points to 8.60 per cent in June from 9.06 per cent in May, backed by normalised market arrivals of seasonal agricultural produce.
The national non-food inflation rate has registered a mild decline too, settling at 9.61 per cent compared to 9.71 per cent in the previous month of May, the official data show.
This minor relief was aided by the stabilisation of the exchange rate near Tk 122.85 per US dollar, which slightly capped the costs of imported raw materials.
The national consumer price index reached 146.11 in June, representing a marginal month-on-month increase by 0.34-percentage points.
The drop in the 12-month moving average inflation from 10.03 per cent in FY2025 to 8.68 per cent in FY2026 reflects a combination of tight economic policies and positive supply shocks over the last year.
Bangladesh Bank maintained an aggressive monetary stance throughout the fiscal year holding its policy rate tight at 10 per cent to actively curb credit expansion and suppress demand-driven inflation.
The implementation of strict government austerity measures and expenditure cuts across non-essential public-sector projects helped lower total domestic liquid capital injection.
"Strong local agricultural outputs and steady crop harvests throughout the year heavily reinforced supply-side stability, preventing structural food shortages," says the BBS report.
"The exceptionally high price levels carried over from the preceding fiscal year (FY2025) created a high comparison baseline, naturally causing the year-on-year calculations for FY2026 to mathematically reflect a downward curve," it adds.
Meanwhile, the cost of living registered a parallel downward shift across both rural and urban boundaries in June last fiscal.
According to the statistical bureau, the point-to-point general inflation decreased to 9.23 per cent last month from 9.48 per cent in May.
Rural food inflation saw a notable decline to 8.52 per cent, down from 8.95 per cent.
The point-to-point inflation rate in urban areas fell to 9.01 per cent from 9.25 per cent in May.
This drop was supported by urban food inflation cooling to 8.76 per cent from May's 9.29 per cent.
Meanwhile, the government of Bangladesh has set a target to keep the 12-month average inflation at 7.5 per cent in the current financial year (FY2026-27).
Notwithstanding a decline in the annual average inflation rate, wage growth for low-paid skilled and unskilled labourers continues to trail behind consumer costs.
The BBS data show that the national point-to-point Wage Rate Index (WRI) grew by 8.18 per cent in June 2026, dropping slightly from 8.21 per cent in May.
By sector, the June wage growth was recorded at 8.21 per cent in agriculture, 8.11 per cent in industry, and 8.34 per cent in services, the official data show.
Because the expansion of wages (8.18 per cent) remains firmly below the headline inflation rate (9.16 per cent), "the real purchasing power of fixed-income workers finishes the fiscal year under continued pressure".
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