Bangladesh Inflation Rate MoM for December 2025 Contracts Sharply, Defying Estimates
Key Takeaways: Bangladesh’s inflation rate for December 2025 fell by 0.84% MoM, significantly below the -0.50% forecast and a deeper contraction than November’s -0.39%. This marks the steepest monthly deflation since August 2025, signaling easing price pressures amid shifting macroeconomic dynamics. The 12-month average inflation rate remains elevated at 0.89% MoM, reflecting persistent underlying inflation despite recent softness.
Table of Contents
Bangladesh’s inflation rate for December 2025 contracted by 0.84% month-over-month (MoM), according to the latest release from the Sigmanomics database on January 13, 2026. This figure notably undershot the consensus estimate of -0.50% and deepened the deflationary trend from November’s -0.39% MoM. The data covers the entire Bangladesh economy and reflects consumer price changes across a broad basket of goods and services.
Drivers this month
- Energy prices fell sharply, contributing approximately -0.30 percentage points (pp) to the MoM decline.
- Food inflation eased amid improved harvests and supply chain normalization, subtracting -0.25 pp.
- Transport and housing costs remained stable, limiting further downward pressure.
Policy pulse
The current inflation rate sits well below Bangladesh Bank’s target band of 5% annual inflation, signaling a temporary easing phase. The central bank’s accommodative monetary stance, with stable policy rates since mid-2025, appears to be balancing growth support with inflation control.
Market lens
Immediate reaction: The Bangladesh Taka (BDT) strengthened modestly against the USD, while 2-year government bond yields declined by 10 basis points within the first hour of the release, reflecting market optimism about easing inflation pressures.
Placing December’s inflation contraction in historical context reveals a volatile trajectory over the past year. The MoM inflation rate averaged 0.89% from January to December 2025, with notable peaks in August (2.23%) and September (2.36%). The recent downward trend contrasts with these summer highs, suggesting a cooling phase.
Historical comparisons
- December 2025: -0.84% MoM
- November 2025: -0.39% MoM
- October 2025: 1.05% MoM
- September 2025: 2.36% MoM
- 12-month average (Jan-Dec 2025): 0.89% MoM
Monetary policy & financial conditions
Bangladesh Bank has maintained its policy rate at 5.75% since June 2025, aiming to support economic recovery while monitoring inflation risks. The recent inflation dip may reduce pressure for immediate tightening, but persistent external risks keep the outlook cautious.
Fiscal policy & government budget
Fiscal stimulus measures, including infrastructure spending and social safety nets, continue to underpin domestic demand. However, government borrowing costs have remained contained due to stable inflation expectations.
What This Chart Tells Us
Bullish scenario (30% probability)
Inflation stabilizes near zero or modest positive territory in early 2026, supported by sustained supply improvements and benign global commodity prices. This scenario would allow Bangladesh Bank to maintain accommodative policy, fostering steady economic growth.
Base scenario (50% probability)
Inflation remains subdued but volatile, fluctuating between -0.50% and 0.50% MoM in the first half of 2026. External shocks such as commodity price rebounds or currency volatility could intermittently push inflation higher, prompting cautious policy adjustments.
Bearish scenario (20% probability)
Supply disruptions or geopolitical tensions trigger a resurgence in inflation above 1% MoM, forcing Bangladesh Bank to consider tightening measures. This could dampen growth prospects and increase borrowing costs.
External shocks & geopolitical risks
Global energy price volatility and regional trade tensions remain key risks. Any escalation could reverse the current deflationary trend, impacting Bangladesh’s import costs and inflation trajectory.
Financial markets & sentiment
Markets have priced in a mild easing of inflation risks, reflected in stable bond yields and a firming currency. However, investor sentiment remains sensitive to external developments and policy signals.
Structural & long-run trends
Bangladesh’s inflation dynamics continue to be shaped by structural factors such as urbanization, wage growth, and supply chain modernization. These long-run trends suggest inflation volatility will persist, requiring vigilant policy management.
December 2025’s inflation contraction in Bangladesh underscores a complex macroeconomic environment. While short-term price pressures have eased sharply, underlying inflation remains elevated on a 12-month basis. Policymakers face a delicate balancing act between supporting growth and containing inflation risks amid external uncertainties. Market participants should monitor upcoming inflation prints and geopolitical developments closely to gauge the trajectory of Bangladesh’s economic recovery.
Key Markets Likely to React to Inflation Rate MoM
Bangladesh’s inflation data typically influences currency, bond, and equity markets sensitive to domestic economic conditions and inflation expectations. The following symbols historically track inflation trends and monetary policy shifts in Bangladesh:
- USDBDT – The USD/BDT exchange rate reacts to inflation-driven monetary policy changes and external trade dynamics.
- DSE30 – Bangladesh’s benchmark stock index, sensitive to inflation and interest rate shifts.
- EURBDT – Euro to Taka exchange rate, reflecting broader currency sentiment and inflation differentials.
- BTCUSD – Bitcoin’s price often moves inversely to inflation fears, serving as an alternative inflation hedge.
- BRAC – Shares of BRAC Bank, a major financial institution, sensitive to interest rate and inflation outlooks.
Inflation Rate vs. USDBDT Exchange Rate Since 2020
Since 2020, Bangladesh’s inflation rate MoM and the USDBDT exchange rate have shown a moderate inverse correlation. Periods of rising inflation often coincide with Taka depreciation against the USD, reflecting inflation-driven monetary tightening and external pressures. The recent December 2025 deflation aligns with a modest Taka appreciation, underscoring the currency’s sensitivity to inflation dynamics.
Frequently Asked Questions
- What is the latest inflation rate MoM for Bangladesh?
- The inflation rate for December 2025 contracted by 0.84% month-over-month, according to the Sigmanomics database.
- How does December 2025 inflation compare to previous months?
- December’s -0.84% MoM is a sharper decline than November’s -0.39% and October’s 1.05%, marking the largest monthly deflation since August 2025.
- What are the implications of this inflation data for Bangladesh’s economy?
- The data suggests easing price pressures, which may allow Bangladesh Bank to maintain accommodative policy, but external risks and structural factors warrant cautious monitoring.
Takeaway: Bangladesh’s December 2025 inflation contraction signals easing price pressures but underscores ongoing volatility, requiring vigilant policy and market attention.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
December 2025’s inflation rate of -0.84% MoM marks a sharp reversal from October’s 1.05% and November’s -0.39%, falling well below the 12-month average of 0.89%. This contraction is the largest monthly decline since August 2025, when inflation briefly surged to 2.23%.
The chart below illustrates the volatile monthly inflation path over the past year, highlighting a peak in late summer followed by a steady deceleration into year-end.