THE price of rice rose by around nine percent in the capital in 2018 compared to a year ago, while the cost of living increased by six percent, the lowest in nine years, said the Consumers Association of Bangladesh. Prices of other essentials — vegetables and house rent ??? went up by 9.38 percent and 5.5 percent. However, cost of a number of essentials such as pulse, garlic, sugar and salt declined compared to that of 2017.
The cost of living for more than 1.7 crore dwellers in the city rose by six percent last year, which is 45 basis points higher than the annual average inflation of 5.55 percent at a national level. This was the lowest spike in the cost of living in nine years since the year 2009 when living cost rose 6.19 percent. In 2017, the rise was 8.44 percent, according to CAB data.
The price hike of different goods is unacceptable and the government should closely monitor the market to check such hikes and take effective measures against unscrupulous people and rackets. This is especially due to the fact that people’s real incomes have not really gone up that far. According to the Household Income and Expenditure Survey (HIES) of 2016, household real disposable income appears to stagnating or some instances even declining while the HIES, 2016 gives a very buoyant picture in its interpretation of the income data just focusing on the nominal values.
Using the HIES data, monthly average household income when adjusted for inflation (using the Consumer Price Index) for the country as a whole between 2005 and 2016 remained almost the same. The rural average household income increased by about Tk 200. This increase in income for the rural households can be largely attributed to overseas remittances.
But the average urban households experienced a decline in its average monthly income by Tk 950. This clearly indicates that nominal wages in the urban areas have failed to keep up with rising costs of living as expressed in the rising prices of consumer goods and utilities. The figures clearly indicate the financial squeeze facing Bangladeshi households is real.
