Bangladesh faces renewed inflationary pressures as global energy prices surge following the ongoing Middle East conflict, according to a report published by the Bangladesh Bank on Thursday.

‘Inflationary pressures in Bangladesh are likely to intensify in the near term, reflecting both elevated international oil prices and upward adjustments in domestic fuel costs, compounded by supply constraints in the energy market,’ said the report titled ‘Inflation Dynamics in Bangladesh: January-March 2026’.

Price pressures are being driven by a combination of external shocks and domestic imbalances, raising concerns over the near-term outlook.

Recent movements in key indicators show that cost-push inflation remains dominant.

In the third quarter of FY26, Bangladesh’s year-on-year headline inflation rose to 8.81 per cent on average, up from 8.3 per cent in the previous quarter. Food inflation drove this increase, averaging 8.6 per cent in Q3, a 1.2 per centage point rise from Q2.

Vegetables and spices registered sharp price increases during the quarter.

Vegetable prices alone contributed 22.7 per cent to overall food inflation in Q3, a dramatic turnaround from a negative 13.4 per cent contribution in the previous quarter.

Protein-based foods remained the largest driver, accounting for 44.6 per cent of food inflation.

Energy inflation increased to 14.9 per cent in Q3 from 14.4 per cent in Q2.

A gas price hike pushed energy inflation excluding solid fuels higher, with gas inflation rising to 11.3 per cent from negative 6.2 per cent in the previous quarter.

The report noted that core inflation, which excludes food and energy, decreased marginally to 8.0 per cent from 8.2 per cent in Q2, though it remained elevated by historical standards.

Import-concentrated items contributed 28.3 per cent to headline inflation in Q3, down slightly from 30 per cent in Q2.

Meanwhile, domestic items’ contribution rose to 71.7 per cent from 70 per cent, indicating that local supply factors played a larger role in driving prices.

The wage-price gap narrowed slightly at the end of Q3, driven by a decline in headline inflation rather than wage growth.

Inflation stood at 8.7 per cent in March 2026, while wage growth remained stagnant at 8.1 per cent, meaning household purchasing power continued to deteriorate.

The report highlighted that near-term inflationary pressures are expected to intensify due to higher global oil prices, domestic fuel price adjustments, and ongoing energy supply constraints.

A positive development was the emergence of favourable base effects as the quarter progressed, leading to some moderation in headline and food inflation by March 2026.

However, the report cautioned that sustained policy vigilance remains essential to anchor inflation expectations and safeguard household purchasing power.