Inflation creeps up again as wage growth falls behind

Bangladesh's inflation edged up again in November despite a full year of monetary tightening, with point-to-point inflation rising to 8.29%, fuelled by a spike in food prices across both rural and urban areas.

New Consumer Price Index (CPI) figures from the Bangladesh Bureau of Statistics (BSS) released today (7 December) show inflation climbed to 8.29% in November from 8.17% in October. While the rate remains below the 11.38% recorded in November 2024, the month-to-month uptick signals renewed inflationary stress.

Infographics: TBS

Meanwhile, wage growth rose by 8.04%, trailing inflation and eroding households' purchasing power compared to last year.

Food inflation at the national level increased to 7.36% in November 2025, up marginally from 7.08% in October, but showing a sharp decline from 13.80% in November 2024. Urban areas saw food inflation at 7.61%, slightly above the rural rate of 7.27%. 

Why food inflation is sticky

At kitchen markets in Dhaka yesterday, cauliflower was selling at Tk50 per piece, round eggplant was priced at Tk80 per kg, radish at Tk40, bitter gourd at Tk100, cucumber at Tk80, and carrot at Tk80.

In addition, turnips were selling at Tk60 per kg, sweet pumpkins at Tk50, and beans Tk60-80. Green chilies were retailing at Tk140, papaya Tk40, and new potatoes Tk120.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said overall inflation rose due to food prices. Non-food inflation slightly declined, indicating that the pressure came from the food market.

The economist also said the taka depreciation, directly impacting import-dependent food items. "Production disruptions, exchange rates, and irregularities have created pressure on food inflation."

Zahid Hussain added that in Bangladesh policy always reacts to reality rather than anticipating it. 

"Can a Tk50 rise in onion prices over three days be explained by production? It is entirely manipulation within a controlled market structure. Pre-existing control mechanisms are repeatedly exploited," he said.

He further explained that, under the current scenario, one clear aspect of inflation in Bangladesh emerges: it no longer shows a downward trend. Instead, it has stabilised at a persistently high level.

M Masrur Reaz, chairman and CEO of Policy Exchange, said that during this season, vegetable prices are normally expected to fall. The fact that they have not means manipulation in the supply chain. 

"The key task now is to identify and curb such manipulation," he added.

Reaz said, "Without an effective market monitoring mechanism and strong enforcement, dishonest traders have room to manipulate prices and supply. This remains a major concern."

Wage growth barely keeps up with inflation

Wage growth continues to trail inflation, with the Wage Rate Index rising 8.04% in November against an inflation rate of 8.29%, marking the 45th consecutive month in which wages have failed to keep pace with price increases.

Sector-wise, wages rose 8.14% in agriculture, 7.86% in industry, and 8.22% in services, none of which sufficiently offset persistent inflationary pressures, shows BBS data.

Meanwhile, non-food inflation fell slightly to 9.08% in November from 9.13% in October and 9.39% in November 2024. Rural non-food inflation was 9.24%, while urban areas saw 8.91%.

Zahid Hussain said that with wages trailing inflation for 45 months, workers' real incomes are steadily eroding. This has weakened purchasing power and placed additional pressure on living standards.

"Labour market pressures are also evident, as opportunities to move to better-paying jobs are limited, leaving many workers trapped in low-wage positions," he said.