Inflation rebounds above 9pc in Apr

: Fuel price rise erodes low-income living standards
: With non-food inflation hitting 9.57pc, wage growth trails at 8.16pc
Bangladesh’s inflation rose above 9 per cent again in April, reversing a brief easing in the previous month and intensifying pressure on low- and middle-income households already grappling with elevated living costs.

Data released on Wednesday by the Bangladesh Bureau of Statistics showed that headline inflation reached 9.04 per cent in April, up from 8.71 per cent in March. The latest figure means inflation has remained above the 9 per cent mark in five of the past six months.

The uptick follows a short-lived decline in March and is widely attributed by economists to the government’s decision on 19 April to raise fuel prices across all categories, a move that quickly fed through into transport, production and food supply costs.

The mid-April revision saw significant increases in fuel prices. Diesel rose from Tk 100 to Tk 115 per litre, kerosene from Tk 112 to Tk 130, octane from Tk 120 to Tk 140, and petrol from Tk 116 to Tk 135 per litre.

Such increases have had broad knock-on effects. Higher fuel costs typically lead to increased transport fares, raising the cost of moving goods from farms to markets. Producers also face higher energy expenses, which are often passed on to consumers.

Reflecting these dynamics, non-food inflation rose to 9.57 per cent in April from 9.09 per cent in March, while food inflation edged up to 8.39 per cent from 8.24 per cent. In recent weeks, vegetable prices have increased by Tk 10 to Tk 15 per kilogram, while fish and meat prices have also risen. Rice prices, however, have remained relatively stable.

The resurgence in inflation is particularly concerning given that wage growth continues to lag behind price increases. The national average wage growth rate stood at 8.16 per cent in April, nearly one percentage point below the inflation rate.

This gap implies a decline in real incomes, even for workers who have received nominal pay increases. Economists note that while a lower inflation rate indicates slower price increases, it does not imply falling prices. For many households, especially those on tight budgets, persistently high prices continue to erode purchasing power.

Mustafa K Mujeri, Executive Director of the Institute for Inclusive Finance and Development, said multiple factors are contributing to sustained inflationary pressure.

He cited geopolitical tensions, particularly instability in the Middle East affecting global energy and food markets, alongside domestic supply-side constraints. According to Mujeri, Bangladesh’s production sector has yet to fully recover, while production, transport and import costs have risen significantly.

“The increase in fuel prices has further intensified this pressure, negatively affecting overall production and supply systems. As a result, strong upward pressure on inflation has emerged,” he said.

“Current economic trends are not conducive to reducing inflation; rather, there is a risk that inflation will remain elevated in the coming months,” he added.

Mujeri also noted that two years of policy tightening have had limited impact, as much of the inflationary pressure is supply-driven—stemming from higher fuel costs, production expenses and global market volatility—rather than demand-driven factors typically addressed through monetary policy.

Looking ahead, he warned that potential increases in electricity tariffs could add further inflationary pressure. Weather-related risks, including hailstorms and possible flooding, may also disrupt agricultural output and supply chains.

Economists have expressed particular concern for low-income households, which spend a larger proportion of their income on food and essential goods. For these groups, rising prices combined with stagnant real wages are steadily eroding living standards.

Mujeri urged the government to prioritise social protection measures, including expanding food assistance and cash transfer programmes to support vulnerable populations. He also called for policies to stimulate employment, increase investment and revive idle industrial units.

“Ensuring food security for low-income groups should be the government’s top priority under the current circumstances,” he said, adding that these concerns should be central to the forthcoming national budget.