Overall inflation in Bangladesh declined in August following a previous drop in July. In August, inflation dropped to 8.26%, down from 8.32% in July—a month-on-month reduction of 0.06 percentage points.
Compared to the same period in 2025, inflation decreased by 0.03 percentage points from 8.29% recorded in August last year.
These figures were released on Monday in the latest Consumer Price Index (CPI) report by the Bangladesh Bureau of Statistics (BBS).
August’s inflation rate was calculated on a point-to-point basis.
According to BBS data, the main reason behind the decline in inflation is the downward trend in food inflation.
Food inflation fell to 7.02% in August from 7.16% in July.
However, non-food inflation rose slightly to 9.32% in August from 9.28% in July.
Consequently, the drop in overall inflation was primarily driven by lower food inflation.
Despite the drop in the inflation rate, it cannot be said that prices have decreased for general consumers.
Instead, the overall monthly Consumer Price Index increased by 2.31% in August compared to the previous month.
The food price index rose even higher, by 3.86%. This means food prices in the market were actually higher in August compared to July; however, because the rate of price increase was lower compared to August of last year, point-to-point food inflation declined.
The slowdown in the rate of food price increases played the largest role in bringing down overall inflation.
Nationally, food inflation fell from 7.16% in July to 7.02% in August. In August last year, food inflation stood at 7.6%, marking a reduction of nearly 0.6 percentage points year-on-year.
Food inflation dropped in both rural and urban areas. In rural areas, food inflation was 7.01% in August, down from 7.14% in July. In urban areas, it decreased to 7.04% in August from 7.21% in July.
As a result, food inflation pressure eased slightly across both types of markets.
However, there was little relief in non-food items. National non-food inflation rose to 9.32% in August from 9.28% in July, indicating that price pressure on non-food items remains relatively high.
Inflation in various sectors—including clothing and footwear, housing, water, electricity and fuel, transport, education, and restaurants and hotels—remained close to or above 9%.
Notably, inflation in the restaurant and hotel sector rose to 12.49% in August.
Inflation was recorded at 9.94% for clothing and footwear; 9.44% for housing, water, electricity, gas, and other fuels; and 9.41% for transport.
On the other hand, health sector inflation dropped to 3.48%.
Analysis of BBS data shows that the drop in food inflation was the primary driver of lower overall inflation in August, supported by relatively stable price growth in the non-food sector.
However, because food and overall price indexes increased on a month-on-month basis, this decline in the inflation rate should not be confused with an actual fall in market prices.
Additionally, the long-term average inflation rate over the past few months shows a slight downward trend.
BBS's 12-month moving average calculated inflation at 9.58% for the September 2024–August 2025 period.
This gradually declined to 8.66% during the September 2025–August 2026 period, indicating that inflation pressure on a 12-month moving average basis has eased compared to previous periods.
Despite this relief, inflation pressure remains considerably high.
Even with overall inflation at 8.26% in August, non-food inflation stood at 9.32%. At the same time, food prices rose by 3.86% and the overall price index by 2.31% month-on-month.
Therefore, the sustainability of the current downward trend will depend on food supply and prices, as well as non-food goods and services pricing in the coming months.
The BBS CPI uses FY22 as its base year. The national index considers 749 varieties of 383 goods and services across rural and urban markets, with price data collected regularly from 154 key markets nationwide.
