Rice, Protein costs push up November inflation GED Report

Business Report :

Bangladesh’s general inflation rose slightly in November, driven largely by higher prices of rice and protein items, even as vegetables continued to provide some relief, according to the latest Economic Update & Outlook released by the General Economics Division (GED) of the Planning Commission.

Overall inflation edged up to 8.29 percent in November from 8.17 percent in October. Food inflation increased to 7.36 percent from 7.08 percent, while non-food inflation remained broadly stable at around 9 percent. Rising food costs, particularly for staple and protein items, continue to weigh on household budgets, despite some easing in vegetable prices, said the report released on Wednesday.

Although rice inflation showed a downward trend across all categories, it remained elevated at 12.26 percent in November compared to 13.77 percent in October. Medium rice prices rose by 10.96 percent, fine rice by 15.43 percent, and coarse rice by 11.04 percent. Rice continued to be the largest contributor to food inflation, accounting for 40.28 percent of the total.
Protein items also added to inflationary pressures, with combined contributions from fish and dry fish reaching 40.77 percent, while beef, hilsa, and pangas fish saw higher contributions compared to October.

In contrast, vegetables played a disinflationary role, though the impact moderated slightly. The negative contribution of vegetable prices improved to -17.37 percent from -20.57 percent a month earlier, with potato and onion prices remaining sharply disinflationary.

The GED report highlighted a widening gap between price and wage inflation. While wage inflation was 8.04 percent against price inflation of 8.29 percent, the relatively narrow difference suggests only partial adjustment of real incomes through wage growth, leaving households under continued pressure. Many families are increasingly feeling the pinch, as rising food costs outpace income growth in urban and rural areas alike.

The report noted positive signs in the external sector, driven by strong remittance inflows and modest export growth. Meanwhile, Bangladesh’s banking sector remained robust, with deposits reaching Tk1,924,635.7 crore in October, reflecting a 9.62 percent year-on-year growth and continued depositor confidence.

Credit growth moderated slightly, with total domestic credit growth slowing to 9.62 percent in October from 10.20 percent in September. Public sector credit growth eased more sharply compared to private sector lending.

Weighted average interest rate (WAIR) spreads varied across banking groups, with foreign commercial banks recording the highest at 8.88 percent and specialised and development banks the lowest at 3.37 percent, reflecting their concessional mandates. State-owned and private commercial banks posted similar spreads at around 5.6 percent.
The GED noted that a WAIR spread of around 5 percent is desirable, balancing efficiency, profitability, and borrowing costs.
While food inflation, particularly from rice and protein items, remains a concern, the GED report suggested cautious optimism for the near-term economic outlook, citing improving fiscal performance, stable banking indicators, and strengthening external accounts. Analysts note that sustained vigilance is necessary to prevent further inflationary pressures, especially in essential food items, as the country heads into the new year.