Attachments
Key Messages
Inflation: The inflation trend showed new hope at the beginning of 2025, with its downward trend continuing in January marking a return to a single-digit rate after three months. General inflation declined to 9.94 percent from 10.9 percent in the previous month, largely driven by reducing food prices. Food inflation, a persistent pressure point, eased to 10.72 percent, down by about 2.2 percentage points from the previous month due to an increased supply of essential commodities. Usually, the price of fresh seasonal vegetables reduces during the winter season. Notably, food inflation has remained above the 10 percent threshold for the tenth consecutive month since April 2024, intensifying financial hardships for households nationwide. Non-food inflation slightly increased to 9.3 percent in January 2025. Both rural and urban areas experienced noteworthy falls in food inflation from the previous month, with rural food inflation dropping to 10.61 percent and urban food inflation reaching 10.95 percent in January. The decline in food inflation is due to seasonal effects, which may rise in the coming months due to the upcoming Ramadan and the government's decision to raise the value-added tax (VAT) on certain products. The year-on-year general and non-food inflations for January 2025 were close to stable, while that of food inflation was 1.2 percentage points higher compared to the same period last year.
Bangladesh Economy: The country's gross foreign exchange reserves fell again in January 2024, after having a significant rise in the previous month, driven by import bills and foreign debt repayments, as well as reduced remittance inflows this month. The reserves reached USD 25.2 billion, reflecting a 4 percent fall month-on-month. The official exchange rate increased in January to BDT 122 after being stable at BDT 120 for the last three months (selling rates). Remittance inflow also dropped this month to USD 2.19 after reaching a record high of USD 2.64 billion in December 2024. Remittance inflows, however, increased by 3.4 percent year-on-year and the country received more than USD 2 billion in remittances for six consecutive months. According to the banks, expatriates have been sending relatively higher remittances through formal banking channels encouraged by a rise in the official dollar rate and a decline in money laundering during the last five months.
Fuel: The national average price for Liquefied Petroleum Gas (LPG) remained unchanged for the 3rd consecutive month at BDT 1,455 per 12-kg cylinder (gas-only price) in January 2025. The Bangladesh Energy Regulatory Commission (BERC) adjusted domestic cooking fuel prices, considering fluctuations in contract prices (CP) from major exporting countries like Saudi Arabia, where the price did not change. The price also depends on the changes in foreign exchange rates and the value-added tax (VAT). In contrast, the LPG price increased in Cox’s Bazar by BDT 30, reaching BDT 1,483 per 12-kg cylinder (negotiated price).
Market Price: In domestic retail markets, the prices of eggs, potatoes, onions, green chili, fresh seasonal fruits and vegetables had a notable decrease month-on-month in January 2025. On the other hand, prices of rice, soybean oil and poultry increased compared to the previous month, and that of wheat, lentils, garlic, sugar, and palm oil remained somewhat stable. A similar trend was observed in the retail markets of Cox’s Bazar, with the exception of poultry (price details provided in Annex I and II).
Imports: The country has seen a steady increase in wheat imports in recent years. During the first seven months of FY 2024-25, wheat imports were about 17 percent higher year-on-year, according to the Ministry of Food. This growth may be attributed to dietary diversification and shifting consumption patterns. The country imported 0.33 million mt of rice after quite a while during the November 2024 to January 2025 period, to maintain adequate stock and to prevent further hikes in rice prices. Bangladesh did not import any rice in fiscal year 2023-24. Multiple extreme weather events since May 2024 have impacted crop production and reduced yield, raising concerns about potential price hikes in the coming months. To mitigate the risk of food supply shortages and bolster stock levels, the government has decided to remove all import duties on rice imports.
Cost of Food Basket: The national monthly cost of a food basket decreased moderately in January 2025 by BDT 71 from the previous month hitting BDT 2,918 per person per month. This moderate fall was driven by reduced prices of many food items like eggs, potatoes, onions, green chili, fresh seasonal fruits and vegetables (Figure 1).
The negotiated cost of an energy sufficient food basket utilized for WFP’s e-voucher outlets in Cox’s Bazar was 1,488 BDT, while that in Bhasan Char (BC) was BDT 1,557 in January 2025 (Figure 2). The costs in Cox’s Bazar decreased by BDT 78, and that in BC by BDT 8 from the previous month. Prices in BC are typically higher due to the limited availability of many commodities and the additional logistics costs of transporting food from the mainland.