The general point-to-point inflation rate in Bangladesh rose in November reaching 11.38 percent, up from 10.87 percent in October 2024. This rate is the highest in the last four months. According to the latest data from the Bangladesh Bureau of Statistics (BBS), the increase was driven by a rise in food inflation, which jumped to 13.80 percent from 12.66 percent. IMF suggests upward policy rate in 2025 to restrain inflation: BB Meanwhile, non-food inflation showed a slight rise of 9.39 percent from 9.34 percent in November. The general point-to-point inflation rate both in urban and rural areas also increased last month. The point-to-point inflation in rural areas in November was 11.53 percent which was 11.26 percent in October. The food inflation in the rural areas was 13.41 percent in November from 12.75 percent in October while the non-food item was 9.72 percent in November from 9.72 percent in October.  On the other hand, the point-to-point inflation rate in urban areas in November was 11.37 percent which was 10.44 percent in October. The food inflation in November was 14.63 percent which was 12.53 percent in October while the non-food item in November was 9.31 percent which was 9.06 in October.    The wage rate index in November was 8.10 percent which was 8.07 percent in October 2024.

With Bangladesh facing higher inflation for a long time, the International Monetary Fund (IMF) has advised keeping the policy interest rate on the rise until inflation decreases. Bangladesh Bank Spokesperson and Executive Director Huseara Shikha hinted this while talking to reporters at her office on Tuesday. She said this ahead of a delegation led by IMF mission Chief Chris Papadakis, scheduled to visit Bangladesh from December 3 to 17 to review the IMF conditions. The IMF says that inflation in Bangladesh is currently above 11 percent. It will remain around 10 percent throughout 2025, and after that, the international donor agency believes it may come down to 6 to 7 percent. The fourth tranche of the US $4.7 billion loan program depends on fulfilling the conditions given by the global lender. Read: BB Governor projects inflation reduction in 8 months The IMF imposed conditions on Bangladesh for providing this loan. Although almost all the conditions given by the lender are on track to be met, it is well behind the revenue collection target. However, the installment has already been released after showing progress in fulfilling most of the conditions. Earlier, in January 2023, the IMF approved a $4.7 billion loan for Bangladesh. It was supposed to provide this loan to Bangladesh subject to conditions. The IMF delegation is reviewing each installment of this loan, which was given in seven installments, before releasing it.

Bangladesh Bank Governor Dr. Ahsan H. Mansur on Thursday said that implementing the government’s monetary policy aimed at curbing inflation will require 12 to 18 months. “After tightening the monetary policy, it takes 12 to 18 months to bring down the inflation rate. So, we have to be patient,” Dr. Mansur said during a press briefing following a meeting on inflation at the Finance Ministry, chaired by Finance Adviser Dr. Salehuddin Ahmed. The governor clarified that the central bank’s approach is focused on controlling inflation rather than reducing the overall price level. “We manage inflation; we don’t aim to lower the price level itself. No country seeks to reduce prices to avoid the risk of deflation,” he explained. Inflation in Bangladesh went up in Oct Deflation, a sustained drop in the price level of goods and services, can initially seem beneficial as money gains purchasing power. However, prolonged deflation can hamper economic growth and often arises during periods of economic instability. Its impact, Dr. Mansur noted, can have both positive and negative effects on the economy. Addressing public expectations, Dr. Mansur urged citizens to remain patient as the policy gradually takes effect. “This isn't something that can be achieved in two to three months. At best, we might see results in 12 months, but 18 months is a more realistic timeframe,” the Bangladesh Bank governor said. BB will ask banks not to impose LC margin on essentials import until Ramadan

Residents of Magura are increasingly distressed as the prices of essential commodities have surged alarmingly across the district. The sudden spike has left many struggling to make ends meet, raising widespread concerns about the impact on daily life. In recent weeks, prices of various essential items, including vegetables, eggs, and chillies, have escalated dramatically. The price of raw chillies has soared to Tk 500 per kg, an incredible increase from just Tk 100 to Tk 120 per kg two weeks ago.  Similarly, farm eggs are now selling at a record high of Tk 180 per dozen, up from Tk 150 a week earlier. Local markets have felt the impact of these price hikes, making it increasingly difficult for families, especially those from middle and lower-middle-class households, to afford basic groceries. The prices of potatoes, bitter gourds, and brinjals have also surged, with potatoes now costing Tk 60 per kilogram, pointed gourds at Tk 80 per kg, and brinjals reaching Tk 120 per kg. Read: Drives conducted in Dhaka’s kitchen markets to monitor prices of essentials “This is becoming unbearable. Everything costs more, yet our incomes remain unchanged. It’s a struggle to buy groceries,” lamented a local buyer. The situation is dire, with some families reportedly leaving markets empty-handed due to soaring prices.  “Many come to the market without buying anything and leave disappointed, while others are forced to pay inflated prices,” another resident added. Market control officials attribute the crisis to excessive rainfall disrupting supply chains, and rising wholesale prices.  “Due to heavy rainfall and increased wholesale prices, the costs of raw chilies and vegetables are rising daily,” stated an official. They expressed concern that if this trend continues, prices may escalate further. Rising transport costs are also contributing to the increases, they noted. The repercussions of these price surges are evident, with many vendors reporting a decline in sales. “I used to sell out my stock easily, but now many customers leave without making a purchase,” said one seller, highlighting the impact on local businesses. Read more: Special task force formed to monitor prices of daily essentials The markets have become nearly devoid of small fish, with what little remains priced beyond the reach of average buyers. Larger fish are also expensive, making them inaccessible to many. Even during the peak hilsa season, prices remain high, with almost every vegetable priced at 80 to 120 takas. Meanwhile, although the prices of beef, goat, and both local and broiler chicken have not surged, the costs of rice and oil have increased. District market control officer Mamunul Islam confirmed that excessive rainfall and rising wholesale prices are driving up the costs of raw chilies and vegetables. He noted the potential for further price increases if the situation continues, exacerbated by rising transport costs.  Read more: Essentials’ prices up in Khulna kitchen markets

The National Board of Revenue (NBR) on Wednesday reduced the regulatory duty on both refined and raw sugar imports by 50 percent to stabilize the local market prices. The duty has been cut from 30 percent to 15 percent, effective immediately. NBR explained that this measure is intended to make sugar prices more bearable for consumers.  It pointed out that various global and domestic factors have contributed to the recent rise in the prices of daily essentials, including sugar. Due to the global war, political unrest, and the significant devaluation of the Bangladeshi currency, prices of several essential goods have escalated. Items such as baby food are also becoming increasingly unaffordable for the common man, NBR noted. It further said that recent student protests and the ongoing flood situation have added additional pressures, driving prices of essential items even higher. NBR accelerates efforts to clear revenue case backlog As a result of the 15 percent reduction in regulatory duty, the customs duty on raw sugar now stands at Tk 11.18 per kg, while refined sugar is taxed at Tk 14.26 per kg at the import level. The NBR expects the price of sugar to decrease by a similar amount at the consumer level.  The NBR also expressed hope that lowering the customs duty will discourage sugar smuggling through illegal channels and boost legal imports.  According to the available data, the annual consumption demand for sugar in Bangladesh is 2 to 2.2 million tonnes where Only 1.5 per cent of the country’s demand is met with locally produced sugar. Meghna Group of Industries (MGI) and City Group are the two main importers of sugar followed by S Alam Group, Abdul Monem Ltd and Deshbandhu Sugar Mills. At present, these five private sugar mills imports more than 98 percent of the country's annual demand for refined sugar, whereas the raw sugar mostly sourced from Brazil.

The European Union on Wednesday offered to delay by a year the introduction of new rules that would outlaw the sale of products that come from forests following an outcry from several governments claiming that it will damage trade and hurt small farmers. The EU’s executive branch, the European Commission, said that “it would make the law applicable on 30 December 2025 for large companies and 30 June 2026 for micro- and small enterprises,” if the 27 member countries and the bloc’s parliament agree. The deforestation regulation’s scope is wide, including things like cocoa, coffee, soy, cattle, palm oil, rubber, wood and products made from them. Critics say it discriminates against countries with forest resources and would hurt their exports, while supporters insist that it will help save forests on a global scale. Deforestation is the second-biggest source of carbon emissions after fossil fuels. In offering to delay the regulation by a year, the commission said that “several global partners have repeatedly expressed concerns about their state of preparedness,” most recently during the United Nations General Assembly in New York. Officials from leading exporters of affected commodities — including Brazil, Indonesia and the Ivory Coast — fear the regulation could act as a trade barrier, hit small farmers and disrupt supply chains. But even EU governments, including in Austria and Germany, have also sought to water the regulation down or delay its introduction. The commission conceded that “the state of preparations amongst stakeholders in Europe is also uneven. While many expect to be ready in time, thanks to intensive preparations, others have expressed concerns.” In addition to offering a delay, it published additional guidance to better clarify the rules for companies and to help national authorities enforce them. The commission encouraged EU member countries and the parliament to endorse the delay by the end of this year.

Dr. Ahsan H. Mansur, newly appointed governor of Bangladesh Bank, has said his priority will be to check the high inflation and restore stability in the financial sector.  Expressing satisfaction over his new responsibility Dr. Mansur told UNB on Tuesday night that he will work with all stakeholders in the financial sector to bring back stability and put it on a solid foundation. On Tuesday night the interim government's law ministry hurriedly waved the age limit of 67 years for anyone to be appointed as governor of the central bank. Economist Mansur is now 72 years old. The last time the age limit provision got amended from 65 years to 67 years was in July 2020 to accommodate the reappointment of then-governor Fazle Rabbi.  Read more: Money launderers won’t be allowed to sleep in peace: New Bangladesh Bank Governor He believed that despite high inflation - it hit 11.66 in July in a 13-year high- the central bank under the previous administration did not give full attention to curb it.  Controlling inflation remains a top priority for any central bank.  However, money supply, exchange rate stability, and inflation control all depend on the decision of the governor. Besides, the standard of living, international trade, investment, and employment depend a lot on the decisions of the central bank of any country, he said. Dr. Mansur started his career as a lecturer, at the Department of Economics, Dhaka University in 1976. He left for Canada for higher studies in economics the same year. As a graduate student and research assistant, he was also offering regular economics courses at the undergraduate level at the University of Western Ontario, Canada (1978-81).  Dr. Mansur joined the International Monetary Fund under its Economist Program in 1981 and thereafter completed his PhD in Economics (on general equilibrium analysis) from the University of Western Ontario in 1982. During his long career at the IMF, he worked in Middle Eastern, Asian, African, and Central American countries. He worked in important functional departments (Fiscal Affairs and Policy Review and Development departments) and area departments (Middle East and Central Asia and Asian departments) of the IMF. Read more: Inflation hits 13-year high of 11.7% in July: BBS He also served as the IMF Senior Resident Representative to Pakistan from 1998-01 and as the Fiscal Advisor to the Minister of Finance, Government of Bangladesh (1989-91).

Bangladesh's economy made a strong turnaround from the COVID-19 pandemic, but the post-pandemic recovery continues to be disrupted by high inflation, a persistent balance of payments deficit, financial sector vulnerabilities, and global economic uncertainty, says the World Bank in its twice-yearly update. Released today, the latest Bangladesh Development Update says that urgent monetary reform and a single exchange rate regime will be critical to improve foreign exchange reserves and ease inflation. Greater exchange rate flexibility would help restore balance between demand and supply in the foreign exchange market.  “Bangladesh’s strong macroeconomic fundamentals have helped the country overcome many past challenges,” said Abdoulaye Seck, World Bank Country Director for Bangladesh and Bhutan.  “Faster and bolder fiscal, financial sector, and monetary reforms can help Bangladesh to maintain macroeconomic stability and reaccelerate growth,” he added. Structural reforms will be key to diversify the economy and build resilience over the medium and long term, including measures to raise government revenues to support investments in infrastructure and human capital, said the global lending agency.  Persistent inflation eroded consumer purchasing power, while investment was dampened by tight liquidity conditions, rising interest rates, import restrictions, and increased input costs stemming from upward revisions in administered energy prices. Foreign Minister for concluding PTA with Indonesia Private sector credit growth slowed further in FY24, reflecting a broader slowdown in investment.  The non-performing loan (NPL) ratio in the banking sector remains high and understates banking sector stress due to lax definitions and reporting standards, forbearance measures, and weak regulatory enforcement.  The balance of payments deficit moderated over the first half of FY24 driven by a surplus in the current account. The report’s companion piece, the latest South Asia Development Update — Jobs for Resilience, also released today, says that South Asia is expected to remain the fastest-growing region in the world for the next two years, with growth projected to be 6.0% in 2024 and 6.1% in 2025.  Growth in South Asia is expected to be driven mainly by robust growth in India and Bangladesh, and recoveries in Pakistan and Sri Lanka. But this strong outlook is deceptive, says the report. For most countries, growth is still below pre-pandemic levels and is reliant on public spending.  Persistent structural challenges threaten to undermine sustained growth, hindering the region’s ability to create jobs and respond to climate shocks.  Private investment growth has slowed sharply in all South Asian countries and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population. “South Asia’s growth prospects remain bright in the short run, but fragile fiscal positions and increasing climate shocks are dark clouds on the horizon,” said Martin Raiser, World Bank Vice President for South Asia.  “To make growth more resilient, countries need to adopt policies to boost private investment and strengthen employment growth.” Saima Wazed, Princess Dechen Yangzom Wangchuck launch Bhutanese version of Bangabandhu’s ‘Unfinished Memoirs’ South Asia’s working-age population growth has exceeded than that in other developing country regions.  The share of the employed working-age population has been declining since 2000 and is low.  In 2023, the employment ratio for South Asia was 59%, compared to 70% in other emerging markets and developing economy regions.  It is the only region where the share of working-age men who are employed fell over the past two decades, and the region with the lowest share of working-age women who are employed. “South Asia is failing right now to fully capitalize on its demographic dividend. This is a missed opportunity,” said Franziska Ohnsorge, World Bank Chief Economist for South Asia. “If the region employed as large a share of the working-age population as other emerging markets and developing economies, its output could be 16% higher.” Read more: Money launderers destroying country's economy: Salma Islam

Finance Minister Abul Hasan Mahmud Ali on Wednesday expressed hope that the current pressure of inflation will ease to a bearable level by the end of the current financial year. The finance minister expressed this hope while presenting the budget implementation progress report for the first quarter ((July-September) of the fiscal year 2023-2024 in the Parliament. By the end of the current financial year, the expatriate income will also increase and the foreign exchange reserves will quickly return to their previous strong position, the finance minister said. 5.33 lakh vacancies in govt departments: Minister Abul Hasan Mahmud Ali said that the country is experiencing significant inflationary pressure due to the increase in the prices of various daily necessities including energy in the international market and the rapid change in foreign exchange rates. However, the current inflationary pressure is expected to come down to a bearable level by the end of the current fiscal year, he said. The minister said that the government has taken various initiatives to control inflation. Gazette notification on Tangail Saree being Bangladeshi GI product Thursday He said that in order to take more effective measures, the Bangladesh Bank is moving forward to implement some pragmatic measures involving monetary policy.   “Interest rates have been hiked several times and loan interest caps have been lifted,” he said. The finance minister said that the current account balance was positive at the end of the first quarter (July-September) of the current financial year due to increase in exports, decrease in import costs and increase in repatriation income. However, he said, due to negative growth in the financial account, foreign exchange reserves have decreased as compared with figures on June 30, 2023. Death of house help: Daily Star executive editor, wife sent to jail The government has already taken various steps to increase foreign exchange reserves, he added. He expected that the foreign exchange reserves to return to their previous strong position very soon.

Bangladesh Bank (BB) on Wednesday announced a contractionary monetary policy statement for the second half of the fiscal year 2023-24 to tame inflation. “The central bank’s priority is to control inflation at any cost. To do this we set a policy of controlling currency flow outside the bank for another step to curb the growing inflation,” said Abdur Rouf Talukder, governor of the central bank. Bangladesh has revised down the economic growth projection for FY 2023-24 to 6.5 percent from the initial 7.5 percent considering the ongoing challenges in the financial sector. Bangladesh Bank authorises 90-day buyers' credit to import essentials for Ramadan The authorities, however, revised the projection for inflation upwards to 7.5 percent from 6 percent as consumer prices persistently stayed high, according to the monetary policy statement. The governor said that the central bank wants to bring down inflation to 7.5 percent by June. For this, the policy interest rate has been increased by 25 percentage points to 8 percent in the new monetary policy. He said that the monetary target is downgraded to curb money supply cutting down private sector credit growth to 10 percent for June from the existing target of 11 percent. Bangladesh Bank unveils SMART-derived interest rates for January According to the new policy, the interest rate is being increased from 7.75 percent to 8 percent. As a result, the interest rate of the money, which other banks will borrow from the BB, will increase. Besides, the central bank hints to increase the reverse repo rate (now called the Standing Deposit Facility or SDF) minimum interest rate by 75 percentage points from 5.75 percent to 6.50 percent. If there is surplus money in the market, the central bank withdraws the money through reverse repo. The cap on the special repo or standing lending facility (SLF) interest rate in the policy interest corridor has been reduced by 25 basis points to 9.50 percent from 9.75 percent. This will reduce the cost of borrowing money from the BB during liquidity crises in banks. Bangladesh Bank dissolves National Bank’s board The monetary policy announced for the first half of the current financial year (up to December) targeted private sector credit growth at 10.9 percent. But this target of credit growth like inflation has not been achieved. And till last November, credit growth in the private sector has been achieved at 9.90 percent, which is 1 percent less than the target.