Consumption compared to Bangladesh's GDP in the outgoing FY24 has been reported as the lowest in three years, as sustained inflation, surging income inequality and waning purchasing power are taking its toll on people, as per official data.
The consumption-GDP ratio has been down by 1.85 percentage points in the outgoing FY24, official count has shown, with its fallout on the overall economy of the country.
Both private and public consumption at the national level have dropped, which affected the overall consumption, analysts say, as price hike makes many buy less food.
The consumption-GDP (gross domestic product) ratio has been estimated to have dropped to 72.39% in FY24 from 74.24% in the past FY23, Bangladesh Bureau of Statistics (BBS) data showed.
In FY22, the consumption-to-GDP proportion was recorded at 74.78% -- the highest in recent past.
Although the impact of the exigency on consumption during the Covid-19 period (FY20 and FY21) was negative, it was found in FY22.
However, it had gone on a decline again in the subsequent two years: FY23 and FY24.
Economists say the higher inflationary pressure has affected consumption both in private and public sectors, with its cascading effect on the economy.
According to BBS's latest GDP data, although the public consumption has been decreasing at a lower rate compared to GDP, the private consumption has fallen significantly.
The general government (public) consumption in proportion to GDP in the current FY24 has been estimated to have decreased by 0.06 percentage points to 5.61% from 5.67% in FY23.
On the other hand, private consumption in terms of GDP has squeezed by 1.80 percentage points to 66.78% in FY24 from 68.58% in FY23.
The inflationary pressure has already hit people over the last one and a half years which forces a cutback on overall consumption in the economy with its adverse impact on production and supply.
Over the last one and a half years the point-to-point inflation has maintained an over 9.0-percent rate, by official count though.
In the past month of May, inflation was 9.89%, BBS data showed.
