United News of Bangladesh

Bangladesh’s overall inflation rose slightly in November and rice remained the single largest contributor to food inflation, accounting for 40.28 per cent, according to the Monthly Economic Update and Outlook released by the General Economics Division (GED) of the Planning Ministry. The government report said general inflation increased to 8.29 per cent in November from 8.17 per cent in October. Food inflation rose to 7.36 per cent from 7.08 per cent, while non-food inflation remained broadly stable at around 9 per cent. Overall rice inflation fell to 12.26 per cent in November from 13.77 per cent in October, with medium rice declining to 10.96 per cent, fine rice to 15.43 per cent and coarse rice to 11.04 per cent. Read more: Rice procurement faces disruption due to 0.5% source tax Despite the downward trend, rice prices remained elevated and continued to exert significant pressure on food inflation. Fish and dry fish contributed 40.77 percent to food inflation, slightly higher than the previous month. Contributions from meat, edible oil and fat declined, while milk, cheese and eggs recorded a modest increase and vegetables continued to have a strong disinflationary impact, though the negative contribution eased in November. At a detailed level, inflationary contributions from all major rice varieties declined. Among protein items, beef, hilsa and pangash fish showed higher inflationary pressure, while soybean oil and liquid milk eased. Potato and onion continued to post negative contributions, with potato remaining strongly disinflationary. The report noted that the gap between price inflation and wage inflation narrowed in October but widened slightly in November. Govt approves import of 1 lakh mt rice from India, Pakistan In November, price inflation stood at 8.29 per cent compared to wage inflation of 8.04 per cent, indicating continued pressure on real incomes despite partial adjustment through wage growth. On the monetary front, bank deposits reached Tk 19.24 crore in October, registering a year-on-year growth of 9.62 per cent, reflecting sustained depositor confidence. Credit growth moderated, with public sector credit growth slowing to 21.43 per cent and private sector credit growth easing slightly to 6.23 per cent. Total domestic credit growth decelerated to 9.62 per cent in October. Weighted average interest rate (WAIR) spreads varied across banking groups. Foreign commercial banks recorded the highest spread at 8.88 per cent while specialised and development banks posted the lowest at 3.37 per cent. State-owned and private commercial banks showed similar spreads of around 5.6 per cent, a level the GED said is desirable for improving banking sector efficiency. Revenue collection by the National Board of Revenue (NBR) fell short of the monthly target in November 2025 although it posted double-digit year-on-year growth. Govt to procure 50,000 mt of non-basmati parboiled rice, 80,000 mt fertiliser Against a monthly target of Tk 36,326 crore, collections stood at Tk 29,658 crore, achieving 83.95 per cent of the target. However, revenue increased by Tk 3,688 crore or 14.2 per cent compared to November 2024. The report said Annual Development Programme (ADP) utilisation improved year-on-year during July–November of FY2025-26, but overall implementation remained sluggish. Despite higher spending, utilisation continued to lag behind targets due to administrative bottlenecks, slow approvals and procurement delays. Bangladesh’s external sector showed strong performance in November. Remittance inflows reached a record USD 2.89 billion while export earnings stood at about USD 3.89 billion, driven largely by the ready-made garments (RMG) sector. Foreign exchange reserves peaked for the year, with gross reserves at approximately USD 32.34 billion and BPM6 reserves at USD 27.58 billion, strengthening external stability. RMG exports accounted for over 80 per cent of total export earnings underscoring continued dependence on the sector and the need for diversification. Read more: Rice biggest driver of October’s food inflation in Bangladesh: GED The GED also highlighted a growing divergence between the real effective exchange rate and the bilateral taka–US dollar rate, indicating potential real appreciation pressures and risks to external competitiveness.

Rice alone contributed about 47 percent of total food inflation in October while vegetables posted a strong negative impact because of seasonal abundance, according to the latest Economic Update and Outlook for November 2025 prepared by the General Economics Division (GED). Protein items including beef, chicken and fish saw steady inflation during the month, driven by feed prices and transport costs, the report said. Overall inflation dropped to 8.17 percent in October 2025, from 10.87 percent a year earlier, driven almost entirely by a sharp fall in food inflation. Food inflation plunged from 12.66 percent in October 2024 to 7.08 percent in October 2025 as rice supply improved due to the Aman harvest, imports and public procurement. Read more: High price of rice in Bangladesh bucks the trend of easing inflation However, non-food inflation inched up to 9.13 percent, reflecting persistent pressure in housing, transport and healthcare—an indication that inflation remains far from under control. Election-related spending and possible disruptions during the transition are expected to add further pressure on inflation and the foreign exchange market, complicating stabilisation efforts, said the report. The report warns that large-scale dollar purchases by the central bank unless sterilized could fuel inflation and distort market-based exchange rate mechanisms. Bangladesh’s economic recovery depend heavily on political stability following the February national election and the next government’s willingness to carry out meaningful reforms, said the GED reprot. The report offers a cautiously optimistic view but warns that deep structural weaknesses along with the political transition period could constrain economic momentum. According to the analysis, the economy could regain pace if the election produces a clear political direction and the next government decisively undertakes long-delayed reforms, particularly in improving the business climate, stabilising the banking system, and ensuring fiscal and energy security. Without such reforms, the recovery may be short-lived, it said. Read more: Bangladesh economy in ‘waiting vortex’; experts urge credible elections The Asian Development Bank (ADB) has forecast around 5 percent GDP growth for FY26 following a sluggish period. Remittances and garment exports continue to provide much-needed resilience but the GED notes that the broader economic environment remains fragile as both investors and entrepreneurs appear to be “waiting” for political stability before committing to new ventures.= While bank deposits grew at nearly double-digit rates through August and September, private-sector credit growth fell to just 6.29 percent—the lowest in at least four years and well below the Bangladesh Bank’s FY26 target of 7.2 percent. High lending rates, cautious bank behaviour and political uncertainty have depressed investment appetite. Meanwhile, government borrowing from commercial banks surged 24.45 percent in September, raising concerns about crowding out private borrowers. Interest rate spreads also exposed deep structural distortions. Foreign commercial banks maintained spreads close to 9 percent—far higher than state-owned and private banks—highlighting issues such as high operational costs, non-performing loans and market concentration. Rising rice prices push food inflation higher in Bangladesh: Report Revenue collection in October 2025 fell short of the target by Tk 8,324 crore, achieving only 77.37 percent of the month’s goal. All major revenue streams—import duties, domestic VAT, and income tax—underperformed. Although collection was slightly higher than in October 2024, the growth of just 2.2 percent was described as “pessimistic” given inflationary pressures and increased public spending needs. ADP utilisation continues to lag despite marginal improvements. Up to October, utilisation stood at 8.33 percent, only a slight increase from 7.90 percent last year. Lower overall allocations and reduced spending under own-financing components indicate financial strain and weak project execution. The report notes that while utilisation rates improved marginally in some categories, the decline in total expenditure—from Tk 8,762 crore last year to Tk 7,720 crore this year—reflects ongoing bottlenecks in planning, fund release and implementation. Foreign exchange reserves improved significantly, rising from USD 24.35 billion in November 2024 to USD 32.34 billion in October 2025. BPM6 reserves also rose sharply, supported by stronger remittances and prudent reserve management. Bangladesh’s June inflation remains high with food inflation at 10.42% Remittances surged in the first four months of FY26, with each month outperforming the previous year and September recording the highest inflows. However, export earnings remained volatile. Exports peaked in July at USD 4.77 billion but suffered sharp declines in April and June. RMG exports mirrored these fluctuations, while non-RMG exports also experienced mid-year downturns. Imports especially capital machinery saw steep contractions year-on-year, signalling depressed investment demand. A slight month-on-month recovery in August and September suggests only tentative stabilisation. The real effective exchange rate (REER) appreciated notably, indicating eroding external competitiveness. Read more: Inflation in Bangladesh edges up to 8.36% in September

In its latest monthly economic update, the General Economics Division (GED) of the Bangladesh Planning Commission has projected cautious optimism for the country’s economic trajectory in FY2026, highlighting both the encouraging trends and persistent structural challenges. According to the GED’s assessment, the first month of FY2026 shows early signs of economic rebound, although growth projections remain modest due to ongoing political uncertainty, subdued investment and industrial activity, and global headwinds, including the recent imposition of reciprocal tariffs by the United States. Multilateral institutions have revised their forecasts downward for the current fiscal.  The World Bank projects growth between 3.3% and 4.1%, while the Asian Development Bank (ADB) estimates it at 3.9%.  A moderate rebound to 5.1%-5.3% is anticipated in FY2026. The report warns of continued low levels of foreign direct investment (FDI), driven by eroding investor confidence, a tight fiscal space due to poor revenue mobilisation, and limited public investment. Bangladesh economy falters; growth slows, factories shut, jobs lost A provisional National Board of Revenue (NBR) estimate indicates a revenue shortfall, compounded in June by temporary work stoppages over the proposed restructuring of the tax authority. GED underscores that remittance inflows, export performance, and manufacturing growth will be key to supporting GDP. It, however, flags a number of threats, including low reserves, changing global buyer preferences and inflationary pressures. Food inflation remains a key concern despite an overall easing trend. Rice prices, particularly medium and coarse varieties, surged in June, with rice alone contributing 50% to food inflation. The report cites rising input costs, post-harvest losses, transport costs, and speculative hoarding as possible reasons, calling for urgent supply chain scrutiny. The banking sector also continues to struggle with decelerating deposit and credit growth.  Private sector credit has remained below 8% for six straight months, weighed down by inflation, tight monetary policy, and reduced import financing. The GED recommends structural reforms, investment incentives, and economic policy reorientation to restore momentum and build resilience in the face of ongoing domestic and global uncertainties.

The General Economics Division (GED) of the planning ministry has projected a gradual economic recovery for Bangladesh, buoyed by favourable  trends in exports, remittances, a stable exchange rate, and easing inflationary pressures. In its April 2025 Economic Update and Outlook, the GED noted that improved investor confidence—particularly following the successful Bangladesh Investment Summit 2025—along with a moderately tight but accommodative monetary policy, is expected to further support industrial growth. The report highlighted the need to reduce commercial lending interest rates to stimulate investment. The GED emphasised the importance of tackling non-performing loans and boosting banking sector efficiency to improve access to credit. It also stressed the government’s ongoing efforts toward fiscal consolidation, which are expected to strengthen fiscal accounts. “Enhancing efficiency in the selection of development projects—prioritising sustainability—will increase the prospects for quality growth,” the report added. While inflation is expected to remain stable between 8.0% and 9.0% during April and May 2025, it remains a concern. Food inflation, which surged to 10.65% in FY2023-24, eased to 8.93% in March 2025 after the availability of winter vegetables improved supply. Key contributors to overall inflation in March included rice (14.62%), fish (11.58%), and vegetables (6.08%). Notably, the prices of brinjal (17.12%), medium rice (16.73%), and hilsa (11.37%) drove up food costs—partly due to seasonal demand during Ramadan and the Bengali New Year. However, rural areas continue to face higher inflation, highlighting the need for more efficient food supply chain management. According to the report Bangladesh’s external sector showed signs of strength in March 2025, with remittances reaching a record $3.29 billion—up 65% year-on-year—boosted by Eid-related transfers and a shift to formal remittance channels following regulatory tightening. From July 2024 to March 2025, total remittances climbed to $21.77 billion, compared to $16.69 billion during the same period the previous year. Foreign exchange reserves rose accordingly, now standing at approximately $25.62 billion. Exports also saw an 11.44% year-on-year increase, reaching $4.25 billion, largely driven by the readymade garment sector. Bangladesh’s diplomatic engagement with the U.S. over reciprocal tariffs has resulted in a temporary reprieve, with the country agreeing to increase imports of American agricultural products. The report noted that despite external gains, investment activity remains subdued. In February 2025, deposit growth slowed to 7.88%, while private sector credit growth was just 7.15%—among the lowest in recent years. Reserves breach $22 bn-mark on back of strong currency, remittances Contributing factors included high lending rates, political and economic uncertainty, and weakened bank health, with around 10 banks seeing diminished lending capacity due to irregularities. Increased government borrowing from commercial banks—up 60% year-on-year—has further strained private sector credit availability. In March, the Taka traded within a narrow band of Tk 121.5755–121.9542 per U.S. dollar, reflecting relative exchange rate stability despite growing demand for LCs and foreign currency. Remittances helped stabilize the currency, with the improved foreign reserve position enhancing the outlook for the external sector. After a weak first quarter, with GDP growing just 1.96% due to industrial slowdown and floods affecting agriculture, the second quarter of FY2025 saw a rebound to 4.48%. Growth was driven largely by the industrial sector, which grew 7.1% in Q2, led by manufacturing (8.49%), mining and quarrying (8.01%), and wholesale and retail trade (6.63%), said the report. While the economic recovery is underway, the GED underscores the need for accelerated reforms, investment stimulation, and structural improvements to sustain the momentum.

Mentioning that around 46 percent people are deprived of social safety allowance, senior secretary and member of the General Economics Division (GED) of the Bangladesh Planning Commission Dr Shamsul Alam on Sunday hoped that all the poor people would come under social safety programmes soon.

The recovery of the country’s economy following the coronavirus crisis is long and slow due to data scarcity, experts say.