Structural bottlenecks, import costs keep inflation elevated in Bangladesh: GED

Highlights:

• Headline inflation rises to 9.42% in May
• Supply constraints, import costs fuel price pressures
• Food and non-food inflation continue to climb
• GED urges structural reforms to ease inflation

Persistent inflation in Bangladesh is being driven primarily by structural supply constraints and rising import costs, rather than excessive domestic demand, according to the latest Economic Update published by the General Economics Division (GED) today (8 July).

The report says inflationary pressures have become increasingly broad-based, reflecting deeper structural weaknesses across the economy. Headline inflation rose to 9.42% in May 2026, up from 9.04% in April, as both food and non-food prices continued to increase.

According to the GED, supply-side disruptions, global commodity price volatility and higher energy import costs remain the main drivers of inflation. Rising production and transportation costs are gradually being passed on to consumers, keeping prices elevated across multiple sectors.

Food inflation continues to be exacerbated by inefficiencies in domestic supply chains. Although the Boro harvest helped ease rice prices temporarily, inflation remained high for vegetables, fish and protein products. The report attributes the persistent price pressures to inadequate storage facilities, weak logistics and market inefficiencies that amplify volatility in perishable food items.

The report also points to growing import-driven inflation. Higher global fuel prices have increased domestic energy and transport costs, creating ripple effects throughout the economy. Transport services and liquid fuel prices recorded notable increases in May, reflecting the impact of imported inflation.

The Bangladesh Bureau of Statistics (BBS) data cited in the report show that non-food inflation has also continued to rise, indicating that cost pressures are spreading beyond food to services and other consumer goods.

This suggests that supply-side constraints and cost-push factors are reinforcing each other.

While acknowledging that demand-side pressures exist, the GED says they are not the primary source of current inflation. Instead, structural challenges, including fragmented supply chains, limited market integration and dependence on imported energy, are playing the dominant role.

The report warns that inflation could remain persistent unless targeted reforms are implemented. It recommends improving agricultural supply chains, expanding cold storage and transport infrastructure, and reducing dependence on imports in key sectors where possible.

The GED says addressing these structural bottlenecks will be essential to restoring price stability, warning that prolonged inflation could continue to erode household purchasing power and complicate macroeconomic management.