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Published : 12 Jun 2026, 01:07 PM
The Centre for Policy Dialogue (CPD) has urged Bangladesh’s policymakers to adopt pragmatic and sustained measures to bring inflation under control.
Reviewing the proposed budget for fiscal year 2026-27 on Friday, the civil society thinktank warned the government’s target of 7.5 percent for the 2026–27 fiscal year may be difficult to achieve after four consecutive years of elevated price pressures.
"We will need a number of effective measures to achieve that target," CPD Executive Director Fahmida Khatun said.
"A realistic monetary policy must be pursued. The contractionary monetary policy should continue for some time. Food supplies need to be maintained. There are supply-side and production-related problems in the rice sector that require attention. There is also an energy crisis, which needs to be addressed," she said.
According to the latest data from the Bangladesh Bureau of Statistics (BBS), inflation accelerated to a 16-month high of 9.42 percent in May.
On a point-to-point basis, an inflation rate of 9.42 percent means that goods and services costing Tk 100 in May last year cost Tk 109.42 in May this year.
Bangladesh's inflationary pressures began to intensify following the COVID-19 pandemic.
The previous Awami League government attributed rising prices to both the pandemic and Russia’s military campaign in Ukraine.
However, some analysts and opposition politicians have argued that corruption and capital flight under the Awami League government also contributed to persistently high inflation.
After the fall of the Sheikh Hasina government in the 2024 student-led mass uprising, an interim government led by Muhammad Yunus ruled the country for about one and a half years.
During that period, Finance Advisor Salehuddin Ahmed and central bank Governor Ahsan H Mansur repeatedly pledged to bring inflation down to a manageable level, but inflation remained elevated.
Reviewing the broader economy, Fahmida said: "Inflation has remained high for the past four years. We are now at a critical juncture because of the energy crisis. Almost all macroeconomic indicators are under pressure."
"The macroeconomy remains fragile. Foreign exchange reserves and remittance inflows are improving, but most other indicators are not in a good position. Against this backdrop, the government has projected GDP growth of 6.5 percent.
“Yet official data show growth of just over 4 percent so far in the ongoing fiscal year, raising questions about how that target will be achieved.
"The implementation record of the ongoing fiscal year's budget suggests that the next budget carries very ambitious targets. Managing such a large budget will be a major challenge," she said.
The proposed budget projects private-sector credit growth of 9.4 percent, compared with only 4.75 percent growth recorded through April of the current fiscal year, she noted.
"Private investment continues to follow a downward trend. There is a clear lack of confidence and enthusiasm in the private sector. Restoring that confidence will be essential if the targets are to be met," she said.
Fahmida said the economy was becoming increasingly dependent on borrowing to finance economic activity.
While higher development spending could boost employment and income generation, she stressed that policymakers must also explain how revenue collection would be increased.
On Thursday, Finance Minister Amir Khosru Mahmud Chowdhury presented a proposed budget of Tk 9.38 trillion for fiscal year 2026-27, 19 percent higher than the original budget for the current fiscal year. The budget projects a deficit of Tk 2.43 trillion.
The government has set targets of 6.5 percent GDP growth and 7.5 percent inflation for the coming fiscal year, while aiming to collect Tk 6.95 trillion in revenue.
However, analysts say the budget sheds a little light on how those goals will be achieved at a time when the economy is facing weak investment, a fragile banking and financial sector, slow revenue growth, weakening export performance and persistently high inflation.
