Bangladesh's inflation rate declined slightly in October, but the cost of living continues to put pressure on households as rising non-food prices offset the relief from cheaper food items.

According to the Bangladesh Bureau of Statistics (BBS), point-to-point inflation stood at 8.27 percent in October, down from 8.34 percent in September. However, the rate remained higher than the 8.17 percent recorded in October last year.

Food inflation dropped significantly to 6.40 percent in October from 7.22 percent in the previous month, reaching its lowest level in 54 months.

In contrast, non-food inflation increased to 9.89 percent from 9.30 percent in September, marking its highest level in 41 months.

BBS officials said the decline in food prices was largely offset by increasing costs of non-food goods and services.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said non-food items had become the primary driver of inflation.

He explained that the fuel price adjustment introduced in September would continue affecting consumer prices for another month or two. Higher electricity tariffs, supply shortages and increased import costs could further intensify the pressure.

Meanwhile, Mohammad Lutfor Rahman, an economics professor at Jahangirnagar University, attributed the decline in food inflation to favourable weather and improved seasonal supplies of vegetables, potatoes and onions.

However, rising transport, education and medical expenses continued to push non-food inflation upward. Higher fuel prices also prompted transport operators to increase fares, passing additional costs on to passengers.

Slower Wage Growth Adds to Household Pressure

Alongside persistent inflation, wage growth also slowed in October, creating additional financial difficulties for ordinary households.

BBS data showed that the wage growth rate declined to 7.63 percent from 7.9 percent in September. It had remained above 8 percent for several months.

Zahid Hussain said the slowdown in wage growth meant workers were losing purchasing power despite the slight decline in inflation.

The wage index covers 63 low-skilled occupations, particularly daily labour-based jobs. According to Zahid, around eight to ten crore people in Bangladesh belong to this group.

He warned that the financial vulnerability of wage-dependent families was increasing as their earnings failed to keep pace with living expenses.

Lutfor Rahman also said persistent inflation was forcing low-income families and daily wage earners to reduce spending, including on essential needs.

Many households are struggling to manage food expenses, children's education and medical bills, with some having to use their savings to cover everyday costs.

The declining purchasing power of consumers is also affecting businesses, as people are spending less on clothing, shopping and other non-essential products.

Economists Question Inflation Target

Economists have also raised concerns about the government's target of bringing inflation down to 7.5 percent.

Zahid Hussain questioned whether the target was achievable under current economic conditions, adding that even 7.5 percent inflation would remain challenging for international competitiveness.

He argued that Bangladesh's inflation was being driven mainly by rising production and operating costs rather than strong consumer demand.

He also pointed to weak market monitoring, additional business costs and concerns over monetary expansion as factors that could contribute to inflationary pressure.

Meanwhile, Md Deen Islam, research director at the Research and Policy Integration for Development (RAPID), said weak investment demand and slower wage growth had kept overall demand subdued.

He cautioned that the full impact of higher energy costs might not yet have appeared in consumer prices and could become more visible as economic activities return to normal.

Deen also credited favourable weather, improved agricultural production and government incentives for farmers for easing food inflation.

A relatively stable exchange rate and steady global commodity prices had also helped control import-related inflationary pressure, he added.

According to him, the exchange rate remained relatively stable at around Tk 122–123 per US dollar during the period, while global commodity prices were mostly stable or declining.