Rising prices continue to outrun wage gains

Average inflation reaches 8.68pc in FY26
against 8.10pc wage growth

Bangladesh’s average inflation rate has exceeded national wage growth for the fifth consecutive fiscal year, highlighting continued pressure on household incomes and suggesting that many families are being forced to curb consumption to cope with rising living costs.

According to the latest data from the Bangladesh Bureau of Statistics (BBS), the average inflation rate during the just-concluded fiscal year 2025–26 stood at 8.68 per cent, while the national wage rate grew by 8.10 per cent over the same period.

The trend has persisted over the past five fiscal years, with consumer prices consistently rising faster than wages.

In FY2024–25, the Wage Rate Index recorded annual growth of 8.10 per cent, while average inflation, measured by the Consumer Price Index (CPI), reached 10.03 per cent.

Similarly, in FY2023–24, wage growth stood at 7.74 per cent against inflation of 9.73 per cent.

In FY2022–23, average inflation was 9.02 per cent, compared with wage growth of 7.02 per cent.

The gap was narrower in FY2021–22, when inflation averaged 6.15 per cent and wage growth reached 6.06 per cent.

The Wage Rate Index tracks earnings of informal daily workers across 63 occupations spanning the agriculture, industry and services sectors.

Economists said the sustained rise in prices of essential goods and services has eroded real wages, meaning that increases in nominal incomes have failed to keep pace with inflation.

As a result, many low-income households have been compelled to reduce consumption and cut back on essential spending to manage growing financial pressures.

Distinguished Fellow at the Centre for Policy Dialogue (CPD), Dr Debapriya Bhattacharya, said the country’s labour force has not received a fair share of the benefits generated by Bangladesh’s economic growth over the past decade.

“Whatever development took place in Bangladesh over the last one decade and more or in recent past, the labour class didn’t get their just share of wages,” he said.

Meanwhile, BBS data released on Monday showed that point-to-point inflation eased slightly to 9.16 per cent in June from 9.42 per cent in May, providing modest relief after inflation reached a 16-month high in the previous month.

Despite the decline, inflation has remained above the 9 per cent mark for the third consecutive month, continuing to weigh on household budgets.

On a point-to-point basis, the national wage rate grew by 8.18 per cent in June, slightly lower than the 8.21 per cent recorded in May.

Economists said the continued gap between wage growth and inflation indicates that real incomes remain under pressure despite recent signs of easing price growth.

Persistent inflation since 2022 has also contributed to a rise in poverty, according to the World Bank.

The organisation estimates that the number of people living in poverty in Bangladesh has risen to around 36 million, reflecting the prolonged impact of high living costs on vulnerable households.