People's income-sapping inflation is expected to steadily fall below 7 per cent by June 2026, healed by contractionary monetary policy, fiscal restraint and improving balance across key economic indicators.
Such a feel-good ambiance of economic rebound from previous slowdown comes clear from a government review Monday at a high-level meeting chaired by Chief Adviser Prof Muhammad Yunus -- ahead of revision of the current national budget and framing in advance the next one by the interim government.
The economic-stocktaking meeting was held at the state guesthouse Jamuna, where Yunus took an insight into the country's overall economic performance and budgetary outlook with senior policymakers.
Among those present were finance adviser Salehuddin Ahmed, planning adviser Wahiduddin Mahmud and Bangladesh Bank governor Ahsan H Mansur.
According to officials who briefed at the discussion, inflation has already shown signs of easing after a prolonged period of pressure driven by currency weakness, supply disruptions and global price shocks. Based on a 12-month average, overall inflation fell below 9.0 per cent in November 2025 in a climb-down for the first time since June 2023.
Point-to-point inflation crossed the 9.0-percent threshold in March 2023, peaking at 9.33 per cent. However, officials said, the mercury dropped below 9.0 per cent again in June 2025 and declined further to 8.29 per cent in November 2025, signalling a gradual but sustained downturn.
The meeting notes that tighter monetary conditions and fiscal discipline were beginning to yield results, with policymakers striking a note of confidence that inflation would continue to moderate over the months ahead.
One of the most politically sensitive issues discussed is the longstanding gap between inflation and wage growth, which has eroded real incomes in recent years. For much of the past decade, rising prices have outpaced wage increases, leaving households poorer despite nominal income gains.
Officials have said gap has begun to narrow in recent months. In November 2025, point-to-point inflation stood at 8.29 per cent, while wage growth reached 8.04 per cent. By comparison, during the 2022-23 financial year, average inflation was 9.02 per cent while wage growth lagged behind at 7.04 per cent.
"This divergence had led to a sustained decline in real income," says one participant. "The current convergence suggests that the situation is gradually improving."
The government believes if inflation continues to fall while wage growth remains steady, purchasing power could recover further during the current fiscal year.
Agriculture, a traditional stabiliser of Bangladesh's economy, featured prominently in discussion. Officials credited timely incentives and improved management for strong boro rice production in the previous fiscal year. With no major natural disasters reported so far, prospects for a healthy aman rice harvest also remain strong.
As of December 15, 2025, the monsoon-time rice production had reached 16.095 million tonnes -- and harvesting is still ongoing. Officials expect total output to exceed the government-set target once the remaining paddy crop is collected.
Although aus rice production fell slightly short of targets, total rice output increased by 7.2 per cent compared to the 2024-25 fiscal year. The meeting expressed confidence that government foodgrain-procurement targets would be met, thus easing pressure on food prices and public stock of the staple.
The meeting highlighted a marked improvement in Bangladesh's external position. As of December 18, 2025, gross foreign-exchange reserves stood at $32.57 billion up sharply from about $25bn in August 2024.
Officials attributed the increase to a more stable exchange rate, stronger remittance inflows and higher interest rates in the domestic financial sector, which have helped curb capital flight and encourage formal inflows.
Reserves are expected to rise further in the coming months.
Current account, another macroeconomic parameter, which had recorded persistent deficits from the 2016-17 fiscal year through 2023-24, has also shown signs of stabilisation. Deficits peaked at $18.7 billion in 2021-22 before narrowing to $6.6 billion in 2023-24. By the end of the 2024-25, the deficit had shrunk dramatically to just $139m.
In the first four months of the current fiscal year, from July to October, the current-account deficit stood at $749m -- a level officials describe as manageable and significantly improved from previous years.
Remittance inflows have remained a bright spot on the economic horizons of Bangladesh. Between July and November of the current fiscal year, overseas employment was secured for around 500,000 Bangladeshi workers, up from 397,000 in the same period a year earlier. During those five months, remittances totalled $13.04 billion, marking a 17.14-percent increase year on year.
Import growth has also returned after prolonged restrictions imposed to conserve foreign exchange. While import growth was negative 1.2 per cent between July and November 2024-25, it rebounded to 6.1 per cent in the same period of the 2025-26 fiscal year.
The rebound is particularly evident in letters of credit (LC) for capital machinery and industrial raw materials -- seen as key indicators of productive investment. Growth in LCs for the import of capital machinery swung from --32.8 per cent in July-October 2024 to 27.7 per cent in the same period of the current fiscal year. For industrial raw materials, LC growth jumped from 10.1 per cent to 40.98 per cent.
Officials said this reflected "improved trade-financing conditions and growing confidence in the financial system after years of mismanagement".
The meeting concludes that many of the macroeconomic imbalances that had plagued Bangladesh in recent years are gradually moving towards equilibrium. While challenges remain, particularly in managing inflation expectations and sustaining reform momentum, policymakers expressed cautious optimism that the economy is stabilising.
For the interim government, the challenge now is to translate improving indicators into tangible gains for households -- and to ensure that economic recovery supports, rather than undermines, the country's broader democratic transition.
mirmostafiz@yahoo.com