Inflation Ticks Up Food costs offset rice relief
Staff Reporter :
Inflationary pressure remained high at the start of 2026, driven largely by rising prices of fish, fruits and vegetables, even though rice prices showed signs of easing, according to the latest report by the General Economics Division (GED).
Headline inflation rose slightly to 8.58 per cent in January 2026 from 8.49 per cent in December 2025, reflecting persistent pressure from food prices, the GED said in its Economic Update and Outlook for February 2026.
Food inflation increased to 8.29 per cent in January from 7.71 per cent in December. In contrast, non-food inflation declined to 8.81 per cent from 9.13 per cent over the same period.
Food remained the largest contributor to overall inflation, accounting for 43.06 per cent of headline inflation in January, up from 40 per cent in December.
Housing and utilities contributed 15.05 per cent, while miscellaneous goods and services accounted for 9.31 per cent.
Within the food basket, the impact of rice prices eased considerably in January as price growth slowed across all varieties.
The contribution of rice to food inflation fell sharply to 22.16 per cent from 37.34 per cent in December.
Overall rice inflation declined to 7.61 per cent in January, compared with 11.92 per cent a month earlier, with medium, coarse and fine rice all recording slower price increases.
However, the moderation in rice prices was offset by higher costs of vegetables, fruits and fish, which continued to keep food inflation elevated.
Vegetables, which had made a negative contribution to inflation in December, turned positive in January, while fish and dry fish remained among the largest contributors to food inflation.
The GED attributed the increase in vegetable prices largely to higher transportation costs and excessive profit-taking by wholesale and intermediary traders.
The report also warned that rising inflation, coupled with stagnant wage growth, is putting increasing pressure on household purchasing power.
While inflation stood at 8.58 per cent in January, wage growth remained almost unchanged at 8.08 per cent, compared with 8.07 per cent in December. Since September 2025, inflation has consistently outpaced wage growth, widening the gap between price increases and income gains.
According to the GED, this trend is eroding real incomes, particularly for low-income households, whose spending is concentrated mainly on essential goods.
Meanwhile, the National Board of Revenue (NBR) failed to meet its revenue target for January despite modest growth in collections.
Against a revised monthly target of Tk 52,545 crore, the NBR collected Tk 37,033 crore, leaving a shortfall of Tk 15,512 crore.
Shortfalls were recorded across all major tax segments, including import and export duties, domestic VAT, and income tax and travel tax.
Overall, the NBR achieved 70.48 per cent of its January target. Revenue collection rose slightly from Tk 36,191 crore in December to Tk 37,033 crore in January, marking a month-to-month increase of 2.3 per cent. On a year-on-year basis, revenue increased by 3.81 per cent compared with January 2025.
The report also highlighted the slow implementation of the Annual Development Programme (ADP) during the current fiscal year.
By January 2026, only Tk 50,556 crore-equivalent to 21.18 per cent of the annual allocation-had been spent, well below the expected mid-year implementation level of 50-58 per cent.
Although Tk 8,679 crore was spent in January alone, the overall pace remained slow. The GED warned that even with faster spending in the remaining months, fiscal year 2025-26 may record one of the lowest ADP implementation rates in recent years, potentially delaying infrastructure projects and increasing costs.
The slowdown was attributed to weak project preparation, procurement delays, land disputes and coordination challenges.
Despite these domestic challenges, the country’s external sector showed relative stability.
Foreign exchange reserves stood at about $33.18 billion in January 2026, while remittance inflows reached $3.17 billion, significantly higher than the $2.19 billion recorded in January last year.
The GED expects remittance inflows to increase further during Ramadan due to seasonal transfer patterns.
Merchandise exports also expanded, driven primarily by the ready-made garments sector. Ready-made garment exports increased from $3.23 billion in December to $3.61 billion in January, while non-RMG exports rose to $798.9 million after a slight decline in December.
However, imports of capital machinery remained volatile, suggesting relatively weak private investment despite rising overall imports.
The GED expressed hope that the new government would adopt prudent measures to maintain macroeconomic stability, including attracting investment, generating employment, controlling inflation and strengthening investor confidence.
The report also stressed the importance of improving ADP implementation, maintaining debt sustainability and ensuring policy consistency to support long-term economic growth.
It further noted that the planned introduction of the government’s Family Card programme could strengthen social protection and provide support to vulnerable groups.
