Across South Asia, inflationary pressures have eased as global commodity prices return to pre-war levels. Sri Lanka, despite its recent bankruptcy, now records deflation. Pakistan has pulled back from inflation rates above 35 per cent to just 4 per cent.
In India and Nepal, inflation is close to 1.5 and 2.7 per cent, respectively. Bangladesh, however, remains an outlier: inflation in July was still above 8.5 per cent, leaving households under pressure.
The divergence is difficult to ignore. Thailand’s benchmark export price for rice has fallen by nearly 40 per cent in a year. Yet in Dhaka, coarse rice is more expensive today than at the height of the Ukraine war.
Crude soybean oil has fallen by 44 per cent internationally, but retail prices in Bangladesh are down by less than half that rate. LPG inputs cost significantly less than in 2022, but consumers pay more for cylinders.
Fuel, too, is a case in point: global crude is cheaper than before the war, yet diesel prices have barely shifted since their record increase in 2022.
Currency depreciation has played a role.
The dollar now trades at Tk 122, compared with Tk 86 in early 2022. Higher energy, transport, and wage costs have also added to local inflation.
Yet these factors do not fully explain why prices in Bangladesh are so slow to adjust compared with its neighbours. Concentrated market power, insufficient competition, and weak regulatory enforcement appear to be keeping prices elevated.
The interim government has made progress in restoring macroeconomic stability. Reserves are recovering, the taka has steadied, and imports have become easier. These improvements create space for more decisive action on prices.
Publishing fuel pricing formulas, reducing overlapping taxes, and enforcing official rates – particularly for LPG – would help restore confidence. Equally important is encouraging competition in staple food markets, where a small group of firms continues to exert disproportionate influence.
Bangladesh is not alone in grappling with the tension between fiscal needs, corporate interests, and consumer welfare. But at a time when global conditions are favourable, the country has an opportunity to break the cycle of persistently high prices.
Aligning domestic markets more closely with international trends would not only relieve pressure on households but also strengthen trust in economic management.
