Overall inflation in Bangladesh increased to 9.13% in February from 8.58% in January, reaching the highest level in 10 months, as reported by the Daily Star. This surge in inflation was primarily fueled by escalating food prices ahead of Ramadan and election-related expenditures. The Consumer Price Index surpassed 9% for the first time since May last year, with food inflation rising to 9.30% and non-food inflation to 9.01% in February.
Bangladesh Bank adopted a cautious monetary policy stance to control demand-driven price hikes, as inflation remained persistently high. According to Zahid Hussain, a former lead economist at the World Bank’s Dhaka office, the increase in inflation is not solely due to monetary policy but also influenced by election-related spending. Campaign expenses, including providing food to voters, contributed to the inflationary pressure.
Ashikur Rahman, principal economist of the Policy Research Institute, cautioned against premature easing by the central bank, warning that it could reignite inflation and harm macroeconomic stability. Meanwhile, concerns were raised about Bangladesh falling behind peer nations and competing economies without significant reforms in tariffs and trade facilitation within the next five years.
Commerce Secretary Mahbubur Rahman highlighted the persistence of non-tariff barriers hindering trade and urged the National Board of Revenue (NBR) to prioritize simplifying the trade regime.
