Imported items drove price rise in March

The contribution of services and import-dependent items to Bangladesh's headline inflation increased slightly in March 2025, while the influence of non-perishable goods and domestically sourced items declined, according to a Bangladesh Bank report titled "Inflation Dynamics in Bangladesh: January–March 2025".

In March, the contribution of perishable goods to headline inflation held steady at 33 percent — the same as in December 2024. However, the contribution of non-perishable goods dipped to 40 percent from 43 percent, while that of services edged up to 27 percent from 24 percent during the same period.

The central bank attributed the change partly to shifts in import dependence. The contribution of import-concentrated items rose to 21 percent in March from 16 percent last December. In contrast, domestic items saw their share fall to 78 percent from 84 percent.

The report also highlighted trends in retail and wholesale prices, saying that prices of most selected commodities remained stable or declined during the January–March quarter, except for Sonali chicken.

While Sonali chicken saw a drop in price and margin — which reflects the difference between retail and wholesale prices — in February, both rebounded in March. The margins for lentils, onions, and green chilies widened towards the end of the quarter, although the prices of potatoes, onions, and green chilies stabilised after notable declines in the previous quarter.

Momentum and base effects also played a role in recent inflation movements.

Headline inflation was largely influenced by favourable base effects at the beginning of the quarter, but a rise in momentum effects — particularly in March — pushed inflation higher. Core inflation, in particular, saw significant increases due to consistent upward momentum.

Food inflation experienced negative momentum in January and February but rose in March. Energy inflation fell slightly, aided by a favourable base. The report projects that base effects will remain positive across all four inflation categories — headline, food, core, and energy — over the next year, though some exceptions may occur.

The diffusion index, which indicates the breadth of price changes across consumer goods, rose in Q3 compared to the previous quarter. In March, prices increased for 209 out of 382 items in the consumer price index (CPI) basket, while 17 items saw price declines and 156 remained unchanged.

Notably, month-on-month food inflation turned positive in March despite a drop in the food diffusion index. This implies that items with price hikes had a heavier weight in the CPI. Meanwhile, the non-food diffusion index spiked, with 153 of 256 items in the category recording price increases.