World Bank Projects Inflation to Reach 9% by FY25

The World Bank (WB) forecasts that Bangladesh's inflation will moderate to 9% by the end of FY25, down from 9.7% in FY24. However, economic growth is projected to slow to 4%, largely due to political unrest and uncertainty affecting the first quarter of FY25.

Overall inflation in Bangladesh decreased by 1.17 percentage points in August, falling from 11.66% in July to 10.49%, as reported by the Bangladesh Bureau of Statistics (BBS). Food inflation also declined, dropping from 14.10% in July to 11.36% in August.

In August, Bangladesh's core inflation surged to 10.57%, surpassing double digits for the first time, driven by rising non-food prices like medicine, clothing, and transportation. This marked an increase from 8.66% in July, according to central bank data. In response, the Bangladesh Bank raised the policy (repo) rate by 50 basis points to 9.50% in late September and increased other interest rates to curb inflation.

Bangladesh's inflation eased for the second consecutive month in September, with the Consumer Price Index (CPI) falling to 9.92% from 10.49% in August, driven by a cooling of both food and non-food prices, according to the Bangladesh Bureau of Statistics (BBS).

The Asian Development Bank (ADB) projects Bangladesh's inflation to hit 10.1% by the end of FY25, driven by supply chain disruptions and higher import costs from currency depreciation. This marks a notable increase from earlier targets of 6.5%. July's inflation rate surged to 11.66%, confirming persistent inflationary pressures.

Bangladesh's rural areas are experiencing a sharper increase in living costs compared to urban regions, with inflation rates surpassing those in cities from April to August 2024, according to the Bangladesh Bureau of Statistics (BBS). Rural food inflation was recorded at 10.25% and 11.44% in April and August, respectively, compared to 10.19% and 11.24% in urban areas.