Bangladesh’s economy has jumped to 6.17 per cent inflation in February this year, the highest in 17 months, driven by soaring costs of foods, further eroding the purchasing capacity of consumers. According to a news report of The New Nation on Tuesday, consumers had to spend 6.22 per cent more than a year ago to buy food. On the other hand, non-food inflation, which includes clothing, fuel, transport, healthcare, and footwear, declined 16 basis points to 6.10 per cent in February from the previous month, data from the Bangladesh Bureau of Statistics (BBS) shows.
Economists and local think tanks, however, are skeptical about the official BBS estimates of inflation, arguing that it is not reflective of the current prices levels and the rate of changes in prices of goods and services. The skyrocketed prices of the essentials were hardly reflected in the official data. The Centre for Policy Dialogue (CPD) at an event on Sunday said the consumption basket used for calculating overall general inflation does not reflect the actual current prices in the market. The inflation situation is more adverse than the bureau estimates. Earlier, another think tank, the South Asian Network on Economic Modeling (SANEM) said that the officially reported food inflation figures were grossly underestimating the actual food inflation faced by financially marginalised households in the country.
The higher prices are particularly painful for the poor and low-income groups, many of whom are already being seen queuing for hours to get subsidised foods from the government’s open market sales operations. Meanwhile, it has been reported that many low-income people live on a single meal a day because of high food prices in the absence of recovery of their income lost due to the prolonged pandemic. Indeed, the government’s increase of prices of kerosene and diesel in November last year caused a massive adverse impact on the prices of both food and non-food items. Allegedly, mismatch in supply and demand, and weak market monitoring have fueled the profiteering tendency among businesses, thus contributing to the unusual price escalation.
We welcome the government’s steps aimed at distributing certain commodities among one crore families, but our concern is that many families are still out of the list. Thus, the coverage should be expanded. The scope for buying commodities at subsidised prices should also be continued for those who have not received cards. Besides, the existing social support programmes such as VGD, VGF, cash pension for the elderly, and the employment generation programme for the poor must be expanded.
