Prices of many essentials, including rice, eggs, flour, garlic, onion, ginger, and turmeric have skyrocketed
Tanvir Sarwar works in a mid-level position at a buying house, and lives with his parents and wife, in Mohammadpur, Dhaka.
His father retired from banking and his mother and wife are both stay at homes, leaving him as the only breadwinner of the family.
But inflation, which has been on the rise since the beginning of the fiscal year, has made it difficult for him to put enough food on the table.
“My income and expenditure no longer have any synergy. This gap is gradually narrowing day by day,” he told Dhaka Tribune.
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Due to Covid-19, Sarwar was also unable to get an increment this year.
“You have to buy products like rice, lentil, oil, sugar, eggs, and chicken. But in the last few months, the prices of these essentials have skyrocketed,” he said.
In order to reduce the monthly expenses, Sarwar stopped buying many of these items.
Making things even worse, his landlord said that he did not increase the rent last year, so both the rent and service charges will go up this time.
Inflation rates have been on a steady rise in the first three months of FY22.
At the end of September, the point-to-point inflation stood at 5.59%.
Inflation stood at 5.50% on average over the past 12 months.
However, in the budget for FY22, the government set the inflation target at 5.30%.
According to the Bangladesh Bureau of Statistics (BBS), general inflation rose five basis points to 5.59% last month, which was 5.54% in August. In June, it was 5.36%.
Food inflation was up five basis points at 5.21%, which was 5.16% in August.
According to the latest data by BBS, the price of rice, eggs, flour, garlic, onion, ginger, and turmeric went up last month.
On the other hand, non-food inflation rose to 6.19% in September. It was 6.13% in August.
In rural areas, food inflation rose to 5.74% from 5.67% in August. Similarly, non-food inflation went up to 5.84% from 5.79%.
However, the inflation situation was slightly better in urban areas. Food inflation increased to 4.03% in September from 4.02% in August.
Non-food inflation in the urban areas rose to 6.65% from 6.59% in August.
Asked about the data collection process, BBS Director General (Additional Secretary) Tajul Islam said: “We usually conduct the survey across the country from the 12th to the 18th of every month. However, for more accurate information, it has now been extended by two more days. Now it is operated from the 11th to the 19th of every month.”
At this time, the information has been taken from two markets in cities and villages of 64 districts of the country.
“This calculation has been made based on the prices of the products in the market at that point in time,” Islam further said.
How can inflation be controlled?
Market analysts and economists are advising various government institutions to act more efficiently.
Professor Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD), advised monitoring the domestic and international markets separately to control the prices of commodities and keep the inflation rate to a minimum.
He told the Dhaka Tribune that the government must first think about the country's market to control commodity prices.
“Firstly, market monitoring needs to be stepped up. Just fixing prices or reducing taxes and VAT may not work accordingly. So, the government has to make sure that the people are getting the benefits of it,” Rahman said.
“Secondly, the government needs to keep accurate statistics on the demand for various import-dependent products in the country.
“Finally, in this situation, the government's social security benefits need to be expanded so that the middle and lower-classes who depend on fixed incomes, can be given some relief.
“Moreover, we have to keep an eye on the international market,” he said.
Now the price of oil is rising in the international market. If the price of oil rises, it will also affect other products in the international market as well.
On the other hand, there is the value of dollars, he said.
“It seems that we will suffer a lot due to the value of the dollar. It was Tk85-86, and now going up to Tk88-90. This will increase our import costs. If that happens, the price of many products will also increase,” Mustafizur Rahman further said.
Therefore, it is important for government agencies working with markets and imports to be prepared in advance by analyzing the international market, he added.
“In this way, they will be able to predict in advance when the government will have to pay attention and to what,” he concluded.