Continued high inflation increases people’s misery
The majority of people in the country have struggled to maintain their daily expenses amid the high inflation that has prevailed over the past six months.
The Bangladesh Bureau of Statistics recorded general one-time inflation of 7.48% in July 2022 as prices of almost all items including staple rice have remained high since February.
Economists and rights campaigners, however, suspected the accuracy of the BBS data, saying the rise in prices of basic necessities and inflation were far higher than the government agency’s calculations.
They noted that the majority of people, mainly fixed income groups and workers in the informal sector, faced a precarious situation since the increase in their wage rate was lower than the rate of inflation.
BBS data showed that the general wage rate in July registered an increase of 6.56%, more than a percentage point less than the rate of inflation.
That means people’s income has gone down, said Selim Raihan, executive director of the South Asian Network on Economic Modeling.
The BBS, which calculates the monthly inflation rate by looking at the price movement of 422 food and non-food items, also recorded general food inflation of 8.19% and non-food inflation of 6.39% in July. , the first month of the current fiscal year. from 2022-23.
The BBS record showed monthly inflation was 7.85% in July 2013, which was the previous highest in nine years.
While revealing the monthly inflation rate during a planning commission briefing on the day, Planning Minister MA Mannan said the inflation rate had come down slightly.
He noted that the inflation rate in July was 0.08 percentage point lower than the inflation rate in June at 7.56%.
Economists said a comparison of two different months paints no real picture of price hikes in basic necessities and their effects on people.
Comparing the same two months gives a more complete picture of inflation, said former director general of the Bangladesh Institute of Development Studies, MK Mujeri.
Responding to a question about the credibility of BBS data on inflation, he said the general perception was that the rate of inflation was much higher than the government’s calculation.
He noted that there were reasons for such a perception as the BBS data collection process was highly suspect.
Ghulam Rahman, chairman of the Bangladesh Consumers Association, said the allegation of data manipulation by BSS was not new.
Manipulated data never yields positive results when executing many plans, such as distributing food to million-dollar families at a rate subsidized by the government to contain inflation, he said. -he declares.
High inflation makes it difficult for low-income and fixed-income groups to maintain their daily expenses, often eroding their savings, driving many below the poverty line, Ghulam Rahman added.
According to the latest data, the monthly inflation rate based on the base year 2005-06 continues to remain high for six consecutive months.
The BBS recorded the monthly inflation rate at 6.17% in February 2022, a 16-month high since October 2020, when the rate was 6.44.
The monthly inflation rate has remained largely unchecked for the past six months, said Policy Research Institute executive director Ahsan H Mansur.
The upward recovery in the monthly inflation rate exceeded the government’s revised inflation target of 5.7% for the 2021-2021 fiscal year by 0.45 percentage points.
The BBS recorded the 12-month average inflation rate at 6.15% in FY22.
AH Mansur predicted that the inflation rate would continue to remain high in the coming months amid the current strains in the global economic situation.
The government has projected the average inflation rate for the current fiscal year at 5.6%.
Former chief economist at the World Bank’s office in Dhaka, Zahid Hussain, said the supply of essential items should be increased to contain high inflation.
He also said unity and timely political decisions were important to control inflation.
The economist predicted that the cost of producing staple foods and vegetables will increase due to the increase in the price of urea to 22 Tk per kilogram from 16 Tk.
Selim Raihan said the misery of the low fixed income group and informal sector workers has continued to increase due to high inflation over the past six months.
He said the majority of people were facing precarious situations since the wage rate has not increased significantly.
Many people have been forced to rely on saving or borrowing to meet their daily expenses, he added.
BBS inflation data in July also showed that rural people, who make up 68% of the country’s population, faced higher inflation than urban dwellers.
The general inflation rate in rural areas was 8.02% in July, compared to 6.51% in urban areas.
In rural areas, the BSS recorded food inflation at 8.79% and non-food inflation at 6.58%.