Bangladesh’s overall inflation showed signs of easing in March, but consumers continue to face high living costs as food and non-food prices remain elevated in the market.
According to the April economic update released on Thursday by the General Economics Division (GED) of the Planning Commission, overall inflation declined to 8.71% in March from 9.13% in February, marking a modest month-on-month improvement.
The report says the decline was largely driven by a reduction in food inflation, which fell to 8.24% in March compared to 9.30% in February.
However, non-food inflation remained largely unchanged at above 9%, continuing to pose a concern for the broader economy.
Despite the statistical easing, there has been little relief for consumers in real market conditions. While rice prices have softened due to increased supply from the Boro harvest and improved market management, prices of other essential food items remain high.
Meat prices have risen significantly and were a major contributor to food inflation, accounting for more than 15% of the increase. Fish and dried fish prices also remain elevated, further adding to household expenses.
Vegetable prices continue to stay high due to seasonal supply shortages and increased transportation costs, placing additional pressure on low- and middle-income households.
Inflationary pressures are not limited to food items. Non-food inflation remains persistent, driven by rising costs in housing, transport, fuel, and services.
Volatility in global fuel markets and fluctuations in the exchange rate against the US dollar have contributed to these pressures.
Economists warn that a sustained decline in overall inflation will be difficult unless non-food inflation begins to ease.
Rising rents, transport fares, and electricity costs continue to directly affect household living expenses, offsetting gains from lower food inflation.
The report also highlighted that wage growth is not keeping pace with inflation. Although wages increased slightly in March, they remain insufficient to match the rising cost of living, leading to a decline in real incomes and increased financial strain, particularly for lower-income groups.
Meanwhile, external sector pressures persist. Foreign exchange reserves have yet to stabilise due to high import costs, especially for fuel and food, which continues to pose a risk to the overall economy.
Export growth has slowed amid weakening global demand. Although the ready-made garment sector remains relatively strong, ongoing uncertainty in international markets is affecting overall export performance.
Rising import costs for energy and food are adding further strain. Continued volatility in global oil and gas prices is increasing production costs in power generation and industry, which are ultimately reflected in higher consumer prices.
Remittance inflows have provided some support, with an increase in earnings sent by expatriates helping ease foreign currency supply pressures. However, this has not been sufficient to fully offset the broader economic challenges.
Looking ahead, the report identified geopolitical tensions in the Middle East as a major risk. Any escalation could disrupt energy supplies, push up global fuel prices, and create additional inflationary pressures for import-dependent economies like Bangladesh.
Experts suggest that restoring stability in the market will require improvements in supply chain management, stronger market oversight, and efforts to reduce production costs.
Increasing agricultural output and enhancing storage systems could also help stabilise food prices over the medium term.