No end in sight: low-income families reel from stubborn inflation
It was 9pm on Thursday when around 50 people, mostly rickshaw pullers, were lying on passenger seats and vans on the side of a road near Mohammadpur's Townhall area.
They were eagerly waiting for a car: a group of people boarding the vehicle usually comes to the largely residential area at around 7pm and distributes cooked foods such as rice and curries free of cost.
For all latest news, follow The Daily Star's Google News channel. However, on that Thursday evening, two hours had already passed but there were no signs of them.
Thirty-eight-year-old Mohammad Sumon was one of the rickshaw-pullers. He, along with his wife, and neighbour Mohammad Tuhin had been sitting in a van. The couple live at a rented house in a slum near Allah Karim Mosque.
Speaking to The Daily Star, they said they might have to go to bed unfed since free food was not available in the evening while there was no food left back home as well.
Sumon said they came here with the hope that the people, whose identities could not be known, would distribute the food like they did since the beginning of Ramadan in early March.
"It has given me a lot of relief as we have been eating and also taking food for our other family members."
Sixty-year-old Shahnaz Begum, who hails from Chandpur, was also there. She has had to rely on the free food since her two daughters who used to work as house-help are now without work.
The elderly woman had hoped to collect foods for the daughters as well as her husband, who is sick.
Sumon, Shahnaz and Tuhin are all the victims of persistent higher inflation, which has hit the purchasing power of the poor and low-income groups hard for the past two years because essentials have become costlier.
The Consumer Price Index grew by an average of 9.73 percent in the first 11 months of the current financial year, which was 8.64 percent during the identical period a year prior, data from the Bangladesh Bureau of Statistics showed.
In 2022-23, the average inflation rate was 9.02 percent, far higher than the average of 6 percent in recent years.
Food inflation surged 54 basis points to 10.76 percent in May from 10.22 percent a month prior.
The higher inflation for one of the longest spells in recent decades has left many households in the low-middle-income country with little resources since food costs consist of a much higher share in their consumption basket.
Sumon, who hails from Pirgachha upazila of Rangpur, has two daughters, one son, and a grandchild. His elder daughter, along with her little girl, also lives with them in a single rented room, which costs them Tk 4,000 a month.
He has been living in the slum for 13 years. Currently, he earns Tk 13,000 per month by pulling rickshaws.
The higher cost-of-living has compelled the family to send the minor son to work. He is employed at a bird shop in Mohammadpur's Basila area, earning Tk 3,000 a month.
However, Sumon's wife has managed to secure Tk 1,800 out of the Tk 3,000 in advance this month since the family's expenses are not covered by the income of the rickshaw-puller.
She used to work as a housemaid. She can't do so now because of poor health.
"I can't meet the family expenditures, so we come here for food because this has allowed my family to survive," Sumon said.
The dragging impact of the Covid-19 pandemic and the severe fallout of the Russia-Ukraine war disrupted the global supply chains and increased the prices of commodities, sending inflation to record levels in most countries.
Although inflation in many other countries has come under control, it shows no signs of taming in Bangladesh since the government and the central bank did not act on time to reverse the price trend.
Recently, the government has limited imports, and the central bank has taken some measures such as making the interest rate market-based entirely and the foreign exchange rate to some extent, yet the moves are yet to make a dent at higher consumer prices, which have shot to a decade-high.
Golam Rahman, president of the Consumers Association of Bangladesh, thinks using bank borrowing to finance the budget deficit has been one of the major sources of skyrocketing inflation.
He argued that when the central bank printed money to keep the government running, it fuelled inflation.
The former secretary also called on the government not to set higher duties on the imports of essential commodities in the upcoming budget.
"If possible, the duty may be set at zero for some essentials to bring down their prices in the domestic markets."
The import duty on rice is significantly higher whereas the productivity is low, he said. "The government should reduce the duty on the import of rice until the productivity goes up."
Like in the fiscal 2022-23, the government has continued in the outgoing financial year selling sugar, lentils, edible oil, and onions and some other products among one crore family members at subsidised rates through state-owned Trading Corporation of Bangladesh (TCB).
Mustafa K Mujeri, a former chief economist of the Bangladesh Bank, said the quantity and the number of beneficiaries should be increased and the leakage in the distribution system needs to be eliminated.
"The real poor should be targeted while selling the food items at lower rates."
He urged the government to put an end to collusion in the supply chain so that dishonest commodity traders can't conspire to gain an unfair market advantage and hurt low-income households.
Comments