Why food inflation feels detached from reality

The officially reported figures showing only a slight rise in food inflation in September 2025 seem hard to reconcile with ground realities. Anyone who has visited a kitchen market in Dhaka in recent months knows that the prices of essentials, such as rice, flour, pulses, edible oil, meat, and fish, have surged far more sharply than the marginal 0.04 percentage point increase would suggest.

The Trading Corporation of Bangladesh's (TCB) daily retail price data for September tells a different story: prices of most staple items were significantly higher than those a year ago. From this perspective, the official estimate of 7.64 percent food inflation appears understated. This raises a fundamental question: are the sampling methods, market coverage, or weighting patterns used by the statistical agency still capturing the lived experience of consumers?

The credibility gap widens further when we look at the composition of non-food inflation. The Bangladesh Bureau of Statistics (BBS) figures suggest that non-food inflation is now the main driver, but the process through which these prices are gathered and weighted remains opaque.

Simply put, we do not know which non-food goods and services are being priced, how often they are monitored, or whether the official basket reflects the actual consumption patterns of urban and rural households today. Without such clarity, any movement in non-food inflation becomes difficult to interpret.

For instance, how much of the increase comes from rent, health, education, or transport costs? And how much reflects administrative price adjustments rather than market dynamics?

In short, the persistence of inflation above 8 percent is real, and perhaps the actual rate is still much higher, but its internal composition appears blurred by data limitations. When food inflation seems far higher on the ground while official numbers show little change, it can erode public trust in statistics.

The need, therefore, is for greater transparency in methodology and communication, particularly regarding how prices are gathered, how index weights are updated, and how regional differences are incorporated. Only then will inflation data become more than a bureaucratic exercise, offering instead a credible picture of the cost pressures ordinary people face.

Another issue that deserves serious attention is the structure of the basket of goods used to calculate inflation. Currently, the food inflation rate is determined using a long list of items, many of which are rarely bought or carry low weight in the average household budget.

When basic commodities such as rice, flour, pulses, edible oil, vegetables, fish, and meat, whose prices have soared, are averaged with dozens of less frequently consumed products, the overall index becomes artificially muted.

From this perspective, it seems more sensible to base the calculation on the prices of essential and commonly consumed food items that actually determine household welfare. After all, inflation is not just a statistical indicator; it reflects the daily struggle of families trying to put food on the table. A narrower, essentials-based food inflation index would thus offer a far more accurate and policy-relevant picture of the pressures real consumers face.

The writer is an economics professor at Dhaka University and executive director at the South Asian Network on Economic Modeling (Sanem). He can be reached at [email protected]