Govt projects inflation to fall below 7% by June 2026 amid tight monetary policy
It noted that the easing of inflation has also begun to narrow the gap between price growth and wage growth, which had sharply eroded real incomes in recent years
The interim government expects that inflation will fall below 7% by June 2026 amid the contractionary monetary policy and austerity measures, according to a high-level review meeting on the country's economic progress.
The meeting, chaired by Chief Adviser Muhammad Yunus at the State Guest House Jamuna, reviewed key macroeconomic indicators, budget expenditure, and recent trends across the financial, external, and real sectors.
Finance Adviser Salehuddin Ahmed, Planning Adviser Wahiduddin Mahmud, and Bangladesh Bank Governor Ahsan H Mansur were among others present at the meeting.
Keep updated, follow The Business Standard's Google news channel
According to a statement issued by the Chief Adviser's Press Wing following the meeting today (22 December), inflationary pressures have already begun to ease after maintaining a higher trend for more than two years.
For the first time since June 2023, the 12-month average inflation rate fell below 9% in November 2025. On a point-to-point basis, inflation declined to 8.29% in November, down from a peak of 9.33% recorded in March 2023.
The government now projects a further slowdown to below 7% by June 2026 as tighter monetary conditions take effect and fiscal discipline is maintained, said the statement.
It noted that the easing of inflation has also begun to narrow the gap between price growth and wage growth, which had sharply eroded real incomes in recent years.
In November 2025, point-to-point wage growth stood at 8.04%, close to the inflation rate of 8.29%. In comparison, during fiscal year 2022–23, inflation stood at 9.02% while wage growth lagged at 7.04%.
Officials said the reduced gap signals the beginning of a gradual recovery in real incomes during the current fiscal year.
At the meeting, agricultural performance was highlighted as another stabilising factor for prices and food security.
On the external front, the meeting noted that financial and foreign-sector indicators have shown marked improvement.
Gross foreign exchange reserves rose to $32.57 billion as of 18 December from around $25 billion in August 2024.
The stabilisation of the exchange rate, higher remittance inflows, and increased interest rates in the financial sector are expected to support further reserve accumulation, said the statement.
According to the meeting discussion, the current account balance has also improved significantly. After running continuous deficits since fiscal year 2016–17 – peaking at $18.7 billion in 2021–22 – the deficit narrowed sharply to just $139 million at the end of fiscal year 2024–25.
During the July-October period of the current fiscal year, the deficit stood at $749 million.
Remittance inflows continued to strengthen, supported by higher overseas employment, said the statement.
The meeting also noted a rebound in imports and trade financing as restrictions were eased.
