Tuesday, May 21, 2024


Dhaka Tribune

Inflation reaches an 11 year high

According to the report, the cost of living in the capital increased by 6.88% in 2020 and 6.5% in 2019

Update : 21 Jan 2023, 07:54 PM

Dhaka's cost of living soared by 11.08% in 2022, according to the Consumers Association of Bangladesh (CAB). 

To put things in perspective, the survey states that the capital's cost of living rose by 6.5% in 2019 and 6.88% in 2020.

CAB gathered monthly price information on 141 food items, 49 non-food items, and 25 services from 11 markets in the Dhaka north and south city corporations.

The study was made public on Saturday where it showed that 17 products, in particular, contributed to the increase in both the cost of living and inflation last year.

Up until April 2022, food inflation in the country's capital was either on the decline or extremely low. However, starting May 2022, both food and non-food inflation began to increase.

Food inflation reached double digits of 10.32% in June, then somewhat decreased in July before reaching its highest level of the year, 15.31%, in August.

The food inflation rate dropped after August and eventually reached 7.04% in December.

The CAB price monitoring included rice, flour, pulses, baked goods, sugar, fish, eggs, domestic poultry, cooking oil, imported fruits, tea, coffee, local and imported milk, washing and personal hygiene products, and transportation costs.

However, non-food inflation is even higher and surpassed this rate.

With regard to the analysis of inflation trends, the CAB has suggested some policy recommendations. The government has expanded help under social protection and subsidized food aid to lessen the strain of inflation on the underprivileged and impoverished.

But in order to shield low- and middle-income consumers from escalating inflationary pressures, the government should expand social safety programs in urban areas.

The Bangladesh Institute of International and Strategic Studies Research director, Mohammad Mahfuz Kabir, prepared the CAB report.

He said that the inflation rate started to increase from February 2022 compared to January. After a brief decline in May, it picked up again from June.

He also observed that the upward trend in energy prices has contributed to rising inflation.

“Fuel price hike resulted in the increase of production cost after it caused the commodity prices and transportation costs to go up,” he explained.

He also said that farmers had to pay more for diesel for irrigation while the price of fertilizer was also high which led to a high production cost.

“On the other hand, volatility of the dollar market driven by the Russia-Ukraine war increased the prices of imported items,” he added. 

Apart from finished products, the cost of production of food and non-food items has increased due to increased import prices of various raw materials.

Golam Rahman, president of the CAB said that there has been noticeable development in the country in the last 15 years and the per capita income of the people has also increased.  

“However, the income of the middle class and lower middle class has not increased much.  Most of the incomes have increased for upper class people which led to a widening income inequality,” he added.

Still four crore people are living below the poverty line in the country and in such a situation, inflation has become a nightmare for the people, he said. 

The overall inflation rate excluding food was 12.32%. Inflation was 10.41% higher for low-income people.

However, non-food inflation turned even costlier and surpassed this rate. 

He urged the government to take special measures to generate employment and increase the income of the common people to reduce the income inequality.  

“The year 2022 was not at all comfortable as there was a negative impact on people due to inflation,” he added, saying that the government has also taken many steps to control inflation.

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