Asian Development Bank (ADB) has projected that inflation in Bangladesh will rise to 10.1% by the end of fiscal year (FY) 2025 due to supply chain disruptions and increased import costs driven by currency depreciation. This forecast is 3.1 percentage points higher than the ADB’s April estimate. The previous government aimed to keep inflation at 6.5% for this fiscal year after it reached 9.7% in FY24.
Persistent inflation has been a challenge for Bangladesh, with rates exceeding 9% since March 2023. Recent data from the interim government showed inflation spiking to 11.66% in July and 10.49% in August, suggesting that prior figures may have been manipulated.
The ADB expects inflation to ease in the second half of the fiscal year due to tighter monetary and fiscal policies, aimed at reducing domestic demand. The central bank has already raised its repo rate to 9.0% and is likely to increase it further to control inflation.
Additionally, the ADB revised Bangladesh’s economic growth forecast down to 5.1%, citing supply disruptions caused by political unrest and recent floods as key factors for the slowdown.
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