IMF warns Bangladesh's inflation may hit 10.9% in FY27, highest in 16 years

Highlights:

• IMF projects Bangladesh's inflation to hit 10.9% in FY27, a 16-year high
• Lender sharply raises its forecast from 6% projected six months earlier
• Bangladesh last recorded comparable annual average inflation of 10.92% in FY11
• Annual average inflation reached 10.03% in FY25 before easing to 8.7% in FY26
• Monthly inflation rose to 8.34% in Sep from 8.26% in Aug
• IMF projects global inflation to rise to 4.7% in 2026 from 4.1%

Bangladesh is heading for a possible 16-year high in inflation, with the International Monetary Fund (IMF) today (13 October) projecting it to reach 10.9% in the current FY27 fiscal year, a sharp reversal from the 6% forecast it made just six months ago.

Bangladesh last recorded a similar annual average in FY2010-11, when inflation reached 10.92%, according to Bangladesh Bureau of Statistics (BBS) data.

More recently, inflation surged amid global price pressures following Russia's invasion of Ukraine, with the annual average reaching 10.03% in FY25.

Inflation subsequently moderated, with average headline inflation falling to 8.7% in FY26, but remained high.

The easing continued into the new fiscal year, with monthly inflation slipping from 8.32% in July to 8.26% in August before rising again to 8.34% in September, BBS data show.

The IMF's latest World Economic Outlook, released today, said, "Global inflation is expected to pause its steady decline, primarily because of the war-induced negative supply shock."

Global headline inflation is projected to rise notably to 4.7% in 2026 from 4.1% last year and will ease to 4.1% in 2027.

"Energy-importing economies outside the technology value chain face the most difficult outlook," it added in its outlook released as global economic and finance leaders gather in Bangkok for the IMF and World Bank annual meetings.

Against this backdrop, the IMF's 10.9% projection for Bangladesh is higher than forecasts issued by other international lenders.

In its September Asian Development Outlook, the Asian Development Bank (ADB) raised its forecast for 12-month average inflation in FY27 to 9%, from 8.8% projected in July.

The ADB attributed the expected increase to the lagged effects of a stronger El Niño event, persistent supply-side price pressures from energy shortages, higher production and transport costs, as well as possible shipping disruptions.

A gradual shift towards less restrictive monetary policy and expanded liquidity support could add to the pressure, the Manila-based lender said.

The World Bank, meanwhile, projected in its October 2026 Bangladesh Development Update that inflation will remain elevated at 8.6% in FY27.

It cited recent increases in domestic energy prices, persistent supply-side constraints, expansionary fiscal policy and a shift towards a less contractionary monetary policy stance.