Inflation eases slightly to 8.26% in August

Bangladesh’s overall inflation eased slightly to 8.26% in August, although wage growth remained below the inflation rate, indicating continued pressure on people’s real incomes.

According to the Consumer Price Index (CPI) report released by the Bangladesh Bureau of Statistics (BBS) on Monday, inflation stood at 8.32% in July, meaning it fell by 0.06 percentage points in August.

However, inflation was 8.29% in August last year, making the year-on-year decline just 0.03 percentage points.

The moderation was largely driven by lower food inflation. Food inflation fell to 7.02% in August from 7.16% in July and 7.60% in August last year.

Non-food inflation, however, moved in the opposite direction, rising to 9.32% in August from 9.28% in July and 8.90% a year earlier.

Inflation also varied slightly between rural and urban areas.

In rural areas, overall inflation stood at 8.31% in August, down from 8.36% in July. Rural food inflation was 7.01%, while non-food inflation rose to 9.59%.

In urban areas, overall inflation stood at 8.20%, compared with 8.24% in July. Urban food inflation was 7.04%, while non-food inflation stood at 8.97%.

Meanwhile, wage growth also slowed in August. The BBS said the year-on-year growth in the national wage rate index stood at 8.05%, down from 8.22% in July and 8.15% in August last year.

This means inflation was 0.21 percentage points higher than wage growth in August, suggesting that the cost of living continued to rise faster than average wage growth.

By sector, wage growth stood at 8.07% in agriculture, 7.97% in industry and 8.25% in the services sector in August. The services sector recorded the highest wage growth among the three major sectors.

Overall, while the slight decline in inflation offered some relief in August, the rise in non-food prices and inflation remaining above wage growth indicate that households continue to face significant cost-of-living pressures.