Low-income families reel from stubborn inflation

Editor's note: In this weekly feature China Daily gives voice to Asia and its people. The stories presented come mainly from the Asia News Network (ANN), of which China Daily is among its 20 leading titles.

One of the longest spells of high inflation in recent decades has severely hit many households in Bangladesh, with food costs in the country making up a major portion of their bills.

On the side of the road near the Mohammadpur Townhall area in capital Dhaka, about 50 people, mostly rickshaw pullers, were either waiting in their seats or lying on passenger seats and vans one recent evening.

If possible, the duty may be set at zero for some essentials to bring down their prices in the domestic market. The government should reduce the duty on the import of rice until productivity goes up.

Golam Rahman, president of the Consumers Association of Bangladesh

They were eagerly looking out for a car — a group of people in the vehicle usually comes to the largely residential area at about 7 pm and distributes free cooked food such as rice and curries.

READ MORE: Over half of world population affected by extreme summer weather

But on that evening, two hours had passed and there was no sign of them.

Thirty-eight-year-old Mohammad Sumon was one of the rickshaw pullers. He, along with his wife, and neighbor Mohammad Tuhin, had been sitting in a van. The couple live in a rented house in a slum near the Allah Karim Mosque.

Speaking to The Daily Star, they said they may have to go to bed unfed since free food was not available in the evening and there was no food at home.

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, from Chandpur, was also there. She has had to rely on the free food since her two daughters who used to work as domestic helpers were now jobless.

The elderly woman had hoped to collect food for her 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 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, up from 8.64 percent in the previous year, data from the Bangladesh Bureau of Statistics showed.

In 2022-23, the average inflation rate was 9.02 percent, higher than the average of 6 percent in recent years.

Food inflation rose to 10.76 percent in May from 10.22 percent a month before.

Sumon, who hails from the Rangpur area, has two daughters, one son and a grandchild. His elder daughter, along with her little girl, lives with him in a single rented room, which costs them 4,000 taka ($33.90) a month.

He has been living in the slum for 13 years and earns 13,000 taka a month by pulling rickshaws.

The higher cost of living has compelled the family to send Sumon's son to work. He is employed at a bird shop in Mohammadpur's Basila area, earning 3,000 taka a month.

Sumon's wife can no longer work as a housemaid because of poor health.

"I can't meet the family expenditure so we come here for food because this has allowed my family to survive," Sumon said.

The impact of the COVID-19 pandemic and conflicts worldwide disrupted 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 showed no sign of improvement in Bangladesh since the government and the central bank did not act on time to reverse the price trend, according to analysts.

The government has recently limited imports and the central bank has taken some interest and foreign exchange rate measures, but the moves have yet to make a dent in higher consumer prices, which have shot to a decade high, they said.

Golam Rahman, president of the Consumers Association of Bangladesh, said 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 fueled inflation.

He also called on the government not to set higher duties on the imports of essential commodities in the upcoming budget.

ALSO READ: China-Bangladesh bilateral trade: Leveraging the yuan for economic stability

"If possible, the duty may be set at zero for some essentials to bring down their prices in the domestic market," he said.

The import duty on rice is significantly higher whereas productivity is low, he said. "The government should reduce the duty on the import of rice until productivity goes up."

Similar to moves in the 2022-23 fiscal year, the government has continued in the outgoing financial year to sell sugar, lentils, edible oil, onions and some other products to families at subsidized rates through the state-owned Trading Corporation of Bangladesh.

Mustafa K. Mujeri, a former chief economist of Bangladesh Bank, said the product quantity and 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 said.

He also urged the government to put an end to collusion in the supply chain so that dishonest commodity traders cannot conspire to gain an unfair market advantage and hurt low-income households.