The consumption pattern of middle-to lower-income groups has changed significantly because of rising inflation forcing them to cut down on basic essentials to survive.
Analysts said that the Covid-19 pandemic, war in Ukraine, global price hikes and currency devaluation were the key reasons for this contraction over the last two years.
A large group of people are now adapting to the idea of eliminating certain food from their diet, like meat protein to tackle rising costs.
Experts said that the upcoming budget, to be placed in parliament on Thursday, will be crucial for the government to cushion the low-income’s cost of living by providing social safety and fiscal incentives.
Products categorized as essential commodities and import dependent essentials should be exempt from payment of taxes or have below 5% tax, said a trade analyst of Bangladesh Trade and Tariff Commission (BTTC), preferring anonymity.
Cost of food, education, shelter and transport has gone up sharply during the last two years under the knock-on effects of the Covid-19 pandemic, commodity price hike on the global market, devaluation of the Bangladesh currency against the US dollar and the Russia-Ukraine war.
Following job loss and erosion of income, middle-to low-income groups have been forced to curtail their daily expenditures and reduce consumption of vital goods, experts observed.
Md Mahbub Hossain, owner of Mahbub General Store in Dhaka's Dilu Road at New Eskaton Area, said some customers switched to unpacked cooking oil, rice, flours and other products to save money as the essentials' prices kept spiralling.
"I have found some well-off sections prefer sunflower and canola oil instead of soybean as price difference has reduced between the commodities," he also said.
Also, the middle-income group shifted to cheaper-brand soaps, shampoos, detergents and some other products as their income eroded, he observed about what appears to be a falling standard of living.
Dr M Masrur Reaz, economist and founder chairman of Policy Exchange of Bangladesh, said that the consumption patterns of low-and middle-income groups have changed while it remained unchanged for the affluent section of the community.
People can adjust the cost of food, accommodation and education downward but it is not possible in case of transportation, he noted.
Cost of transportation escalates with the fuel-cost hike.
The government will have to be proactive to negotiate with the fuel-supplying countries to ensure uninterrupted supply of the energy at a reasonable cost, he suggested.
Syed Shamim Reza, former leader of the Real Estate and Housing Association of Bangladesh (REHAB) and managing director of Imperial Consultants and Development Ltd, said that apartment sales dropped alarmingly due to increase in raw materials' prices and erosion of income of most people.
Well-off sections are not affected with the price hike but survival of real-estate business is at stake as majority people are unable to purchase apartments at higher prices, he said about the economic fallout.
