Dhaka: From over double digits a year ago, the general point-to-point inflation rate has dipped far below the two digits over the last year, thanks to the prudent macroeconomic management and policies by the interim government, offering tentative signs of economic stabilization. Before the ouster of the fascist Sheikh Hasina regime in the wake of a massive and bloody student-led mass uprising last year, the country was reeling from severe mismanagement in the macroeconomic front, leading to disruption in the supply chain, debacles in the socio-economic sector, and high inflation amid sufferings for the commoners.
According to Bangladesh Sangbad Sangstha, with the changeover of power and with the passage of time, things have changed during the interim government over the last year as the inflationary pressure has now mostly subdued. In the month of July 2024, a few days before the fall of the dictator Sheikh Hasina regime on August 5, 2024, Bangladesh's general point-to-point inflation reached 11.66 percent, a 12-year high. This was primarily driven by a surge in food inflation, which hit 14.10 percent, the highest in at least 13 years. Non-food inflation also increased, reaching 9.68 percent.
Over time, by June 2025, the point-to-point food inflation significantly declined to 7.39 percent, the lowest over the last two years. The point-to-point food inflation in May 2025 was 8.59 percent, according to data from BBS. Meanwhile, the non-food inflation rate also showed a declining trend, reaching 9.37 percent in June 2025, down from 9.42 percent in May 2025. The point-to-point inflation rate declined in both rural and urban areas last month.
The overall inflation dropped to 8.48 percent in June, down from 9.05 percent in May. This marks the lowest reading in 35 months and the first time since March 2023 that inflation has fallen below 9 percent. The decline was driven by a fall in both food and non-food prices. Policymakers and economists say this suggests early signs of improvement in the country's macroeconomic situation.
Planning Adviser Dr. Wahiduddin Mahmud noted that the interim government, after assuming responsibility, had designed the monetary policy in a way to ensure the supply of necessary capital despite banking sector debacles following the ouster of the fascist Hasina regime. To keep the feeble banking sector alive, a contractionary monetary policy was adopted as part of supplementary measures to contain inflation. The government also tried to keep the budget deficit in FY26 below 4 percent of GDP, so domestic and foreign borrowings did not increase much in the current fiscal year (FY26).
Dr. Mahmud highlighted that reducing the size of the ADP has helped contain inflation. However, he emphasized the need to increase employment to ensure the benefits of reduced inflation reach low-income groups. The Planning Adviser also mentioned ongoing issues with educated unemployment, which cannot be resolved overnight.
General Economics Division (GED) Member of the Planning Commission, Dr. Monzur Hossain, pointed out that although fine rice and vegetable prices have declined, the price of coarse rice remains slightly higher. In June last, rice contributed to about 50 percent of the food inflation, up from 40 percent in May. He urged government agencies to investigate and address the rising rice prices despite good stockpile levels.
Former Lead Economist of the World Bank Dhaka Office, Dr. Zahid Hussain, attributed the declining trend in inflation to favorable environmental conditions, a stable exchange rate, and prudent monetary policy by the central bank. He noted that food grains and seasonal fruit production were strong, contributing to the relief of consumers. Dr. Hussain expressed optimism that if the interim government maintains its current strategy, further reductions in inflation could be achieved.
FBCCI Administrator Md Hafizur Rahman noted that improved market monitoring has significantly reduced the impact of inflation on common people, which is a positive development.