Inflation to come down below 5% by FY26: BB Governor

Bangladesh Bank (BB) Governor Dr Ahsan H Mansur has expressed his optimism that the general point to point inflation rate would come down below 5% by the next fiscal year (2025-26).

“Our aims are to bring inflation down to 7% by next June. We’ll bring it down to 5% by the next fiscal year (2025-26) and I hope it is possible. We’re implementing different policy measures to this end,” he said.

The central bank governor said during an interview at the bank’s headquarters in Motijheel area of Dhaka.

According to the latest data from the Bangladesh Bureau of Statistics (BBS), the general point-to-point inflation rate in Bangladesh slightly increased in November as it reached 11.38% from 10.87% in October 2024.

The increase was mainly driven by a rise in food inflation, which increased to 13.80% in November from 12.66% in October.

Meanwhile, the non-food inflation rate also showed a slight increase reaching 9.39% in November from 9.34% in October.

Dr Mansur said that due to floods swiped almost across the country damaging food grains and vegetables outputs, the prices of vegetables and food items are high in the market.

“But, it will come down soon. If we can bring inflation down to 7%, then we’ll reduce the bank's interest rates and policy rates,” he added.

He said the central bank has reviewed the situation in many countries, including the US, the UK, European Union or Thailand.

“We’ve found that it takes at least 12 months to bring down inflation to a desired level. So, we’ve to allow that certain time,” he added.

Dr Mansur said inflation has not yet come down although monetary policies have been tightened as well as the fiscal measures are being implemented to control domestic borrowings.

“We’ve already made the monetary policy very tight. We’ve increased the policy rate. I’m observing the situation and I think, I will watch until the January data comes. So far it has been disappointing,” he added.

Explaining these, the central bank governor said this is for two reasons as the previous government manipulated data.

“Now there is no restriction. So, last year was low, this year is actual and we’re waiting for the economy to react to the doses of economic policy tightening this time,” he added.

Apart from tightening the monetary policy, Dr Mansur said the government has also removed import duties on essential food items like onions, vegetable oil, and sugar to help ease inflationary pressures on the commoners.