Inflation likely to fall below budget target: BB governor

Bangladesh Bank Governor Dr Ahsan H Mansur has expressed optimism that the country’s inflation rate will decline further than the target set in the proposed national budget for fiscal year 2025–26.

He made the remarks while speaking at a post-budget press conference at the Osmani Memorial Auditorium in Dhaka on Tuesday.

The governor noted that while the budget aims to keep average inflation at 6.5%, current economic indicators suggest a more favourable outcome.

“The budget sets an average inflation target of 6.5%. I believe we will perform better, and inflation will fall below that level,” he said.

He identified the exchange rate as a key factor in stabilising inflation. According to the governor, the recent improvements in currency stability have been instrumental in restoring confidence in the economy.

“The exchange rate has remained stable at around Tk122 to Tk123 per US dollar for a considerable period. This has provided much-needed relief and strengthened our economic outlook.”

Governor Mansur highlighted a significant decline in both food and non-food inflation. Food inflation, which had previously reached double digits, has eased to 8.5%. Meanwhile, non-food inflation has dropped from 11.5% to just over 9%.

“This downward trend in inflation is encouraging, and I expect it will continue,” he added.

He also pointed to external and domestic factors supporting this positive momentum. International oil and gas prices are not expected to rise further, while Bangladesh’s export performance has improved notably. At the same time, the central bank has continued to enforce a tight monetary policy to control inflationary pressures.

“These combined measures—including monetary discipline, stable exchange rates, and favourable global conditions—will help bring inflation down even further, potentially below the official budget target,” the governor concluded.