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The purchasing power of citizens decreases in 2021

| Update:
Dec. 28, 2021, 8:47 a.m.

The purchasing power of a large majority of the population has decreased considerably in 2021, as their cost of living has greatly exceeded income which has also increased, but only marginally.

People, especially those in the low and lower middle income groups, regretted that their spending on essential goods and utilities and other services had grown at a much faster rate than their income.

The economic hardships of the population were revealed in a press survey of a representative sample of the population by The FE over the past week.

He found that most of the essentials, such as edible oils, flour, sugar, chickens, fish, red meat, milk, pulses, vegetables and home care products, and services such as LPG, water, transportation, drugs and others climbed 6.0% to 40% in the outgoing calendar year compared to the previous year.

However, spending on rice, house rents, and a few other products or services remained almost static in 2021.

Market experts said the pandemic-induced sluggishness of business, higher tariffs on some imported products, an active market union, rising diesel and kerosene prices as well as rising global fuel prices. raw materials had a cumulative impact on the market.

Md Farid Hosain, seller of a grocery store in West-Dhanmondi in the city, earned 12,000 Tk per month in 2019. The closures induced by the pandemic in 2020 led to a drop in his family’s income.

“I have been lucky that the store owner has not cut my job and even increased the salary by Tk 1,000 per month since the start of 2021,” he said.

His wife was also making 7,500 Tk per month at a local beauty salon, but her income has remained stable over the past two years due to the pandemic.

But, he said, his family of four’s expenses have increased to a low of Tk 21,500 per month now, despite spending cuts on some food items like fruits, milk, vegetables, etc. fish, meat and socio-religious programs.

The average monthly family expenditure was Tk 19,000 in 2020.

The expenses included the rent of the house 7,500 Tk, rice 2,200 Tk, fish, meat and eggs 1,800 Tk, vegetables, potatoes and legumes 400 Tk, bottled gas 980 Tk, water 300 Tk, electricity 500 Tk to 800 Tk, cable TV 250 Tk, flour Tk 150, edible oil Tk 300, complementary baby milk Tk 1700, baby diaper Tk 650, sanitary napkin Tk 100, medicine Tk 1200, sugar, tea and milk Tk 250 and transport Tk 400.

“Previously my wife could save 500-800 Tk per month. But now we have to borrow money,” he said on a disappointed note.

The family’s monthly expenses increased 13% in 2021 compared to 2020 while their income only increased by 5.0%.

The household survey based on FE interviews included teachers, bus staff, salespersons / women in department stores, malls and grocery stores, security guards, vegetable vendors, CNG rickshaw drivers, rickshaw pullers, carpool drivers, motorists. side tea merchants in the city.

It found that most monthly expenses for low- and lower-middle-income families saw an increase of 10-13% in 2021 compared to an increase in their income of 4.0-6.0%.

The survey covered monthly expenditure on 21 categories of essential products and seven types of utilities and utilities, excluding education, clothing, tobacco and some other components.

Official data also showed an upward trend in prices, as November 2021 data from the state-run Bangladesh Bureau of Statistics (BBS) showed point-to-point inflation increased to 6.2 for cent, calculated on the basis of the consumer price index (CPI).

Food inflation reached 5.9% and non-food inflation 6.78% in November 2021.

Meanwhile, the latest report from the International Food Policy Research Institute (PRI) released on Sunday showed that the moderate or severe food insecurity situation in Bangladesh has returned to pre-pandemic levels in 2021.

The study found that two in three rural households in September-October 2021 worried about not having enough food and more than half of rural households reported buying food on credit or borrowing money.

A study by World Vision Bangladesh in 2021 found that more than 58% of the marginalized and ultra-poor in the country experienced a noticeable drop in their income due to the Covid-19 pandemic which forced many of them to eat even one meal a day instead of three. .

Arunava Saha, deputy director of the integrated technical program at World Vision Bangladesh, said the main reason for the drop in incomes of the marginal poor and the ultra poor was the Covid-induced foreclosure that distorted the value chain.

He said their report found that the number of households eating three meals a day increased from 98% to 70% with the advent of Covid-19.

“The situation has remained worse for those who have lost their jobs or even seen their incomes drop as a result of the pandemic,” said Dr Khondaker Golam Moazzem, director (research) of the Center for Policy Dialogue (CPD). He says the prices of basic necessities have increased in Bangladesh and elsewhere in the world, mainly due to rising prices for raw materials like fossil fuels, fertilizers, seeds, machinery and others.

The dominant market played by large importers, millers and hoarders versus the government’s smaller share of the market has also caused prices to skyrocket, he adds.

The economist suggests that government safety net programs, such as free market sales of basic necessities, should be significantly expanded to help the poor during this economic plight caused by the pandemic.

“The price of diesel should be immediately reviewed to avoid a further rise in the prices of basic necessities and services; agricultural mechanization should be stimulated to reduce the cost of food production,” he said.

He also believes that the government itself will need to increase employment through its regular development programs, rural infrastructure development and safety nets during this difficult time to help those struggling to survive.

Bangladesh Consumers Association (CAB) vice chairman SM Nazer Hossain said the government should remove import duties on products like edible oil, sugar, milk and others. essential products dependent on imports to provide relief to consumers. He said import duties on rice should also be rationalized following its uptrend in the market.

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