Contractionary policies, prudent management will bring inflation below 7% by June 2026, says government

On a 12-month average, overall inflation in the country fell below 9 percent for the first time in November since June 2023

The interim government expects overall inflation to fall below 7 percent by the end of the ongoing fiscal year, courtesy of “contractionary monetary policies and fiscal prudence”.

The projection was discussed during a high-level meeting on Monday, led by Chief Advisor Muhammad Yunus, focusing on the nation’s economic progress and budgetary expenditures.

Finance Advisor Salehuddin Ahmed, Planning Advisor Wahiduddin Mahmud, and Bangladesh Bank Governor Ahsan H Mansur attended the session at the State Guest House Jamuna.

A statement from the Chief Advisor’s Office (CAO) said, on a 12-month average, overall inflation dropped below 9 percent in November 2025 for the first time since June 2023. Point-to-point inflation had reached 9.33 percent in March 2023, fell below 9 percent in June, and declined further to 8.29 percent in November.

The Bangladesh Bureau of Statistics (BBS) data indicate that food prices pushed inflation slightly up in November, with point-to-point overall inflation at 8.29 percent, compared with 8.17 percent in October. Food inflation rose from 7.08 percent in October to 7.36 percent in November, while non-food inflation slightly fell from 9.13 percent to 9.08 percent.

Despite easing inflation, wage growth remains sluggish. During the meeting, the CAO highlighted that the gap between inflation and wage growth had been high in previous years, reducing real income.

However, in recent months of the current fiscal year, this gap has narrowed significantly. In November 2025, point-to-point inflation and wage growth stood at 8.29 percent and 8.04 percent, respectively, compared with 9.02 percent and 7.04 percent in fiscal 2022-23.

“The decline in inflation and narrowing gap with wages will gradually restore real income,” the statement noted.

The government also expects a good Boro harvest due to proper incentives and management in the agriculture sector, and anticipates favourable Aman paddy yields in the absence of natural disasters. This is expected to help meet the year’s food grain procurement targets.

The statement highlighted that economic imbalances have moved toward equilibrium. As of Dec 18, gross foreign currency reserves reached $32.57 billion, up from around $25 billion in August last year, with further increases expected.

Between July and November 2025, 500,000 workers were employed abroad, compared with 397,000 in the same period last year. Remittances reached $13.04 billion, 17.14 percent higher than the previous year.

Relaxation of import restrictions contributed to a 6.1 percent import growth during July–November 2025, compared with negative growth last fiscal year.

The opening of credit letters for capital machinery increased 27.7 percent during the same period, reversing a 32.8 percent decline in July–October 2024. Meanwhile, credit letters for raw materials in industry surged from 10.1 percent to 40.98 percent year-on-year.