Daunting times for people on fixed incomes as inflation bites
Mohammad Shabuj Sheikh cut his food expenses, Shibly Ahmed eliminated all non-essential purchases for his children and a young banker gave up her domestic help.
Although they live in three different parts of the country, the three people on fixed incomes are fighting a common enemy: rampant inflation with no adjustment in wages.
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They are among hundreds of thousands of people in Bangladesh who are facing an acute form of inflation as essentials slip away from them as price hikes have eclipsed their monthly salaries following rising fuel prices, to rising commodity costs, transportation fares, medical expenses and education expenses.
According to the state-owned Trading Corporation of Bangladesh, the price of regular rice has increased by 12% over the past year, unbranded flour by 58%, branded flour by 44%, soybean oil in 37% bulk, 33% bottled soy, 38% lentils, 28% potato, 17% sugar and 32% free-range eggs.
The transport tariff has increased twice in the past nine months – first on November 5 and the second on August 6 – after the government revised fuel prices upwards to pass on their higher international prices to the audience.
A surge in consumer prices led to higher food inflation, which stood at 8.19% in July, down slightly from the multi-year high of 8.37% recorded there. one month old. Non-food inflation rose six basis points to 6.39% in the same month.
Fixed income groups are particularly exposed to a much higher risk than other income groups because their salaries have not been revised in line with the rising cost of living.
Mohammad Shabuj Sheikh, a young man working as a security guard in the Pallabi district of Mirpur, is buying less than necessary as the price of basic necessities has risen.
“I can’t even afford the most important things right now. I eat less because my income hasn’t increased,” he said.
Shabuj’s mother lives in Savar and he used to visit her twice a month. But since the round trip fare was increased by Tk 100 following the unprecedented increase in fuel costs last week, the 22-year-old has given up on plans to continue visiting him this month. .
His fate does not end there.
Shabuj’s wife is pregnant and the young couple hope to welcome their first baby in four months. His wife now lives with her grandparents in her village house in Magura.
He receives a salary of Tk 12,000 per month, of which Tk 3,500 is spent on house rent, Tk 2,500 for food and the rest is sent to his wife. This leaves him with nothing to save.
“After a few months, our child will come into the world. I will need a little more money for the baby. How am I going to manage?” Shabuj said with a sigh of relief.
Arif Hossain, a textile worker in Savar, has been the breadwinner for four members of his family since his father fell ill two years ago.
Since his income is not enough for the family expenses, he had to persuade his wife to join a garment factory as a worker so that she too could contribute to the family in this difficult situation.
Shibli Ahmed, a resident of Agargaon who works in a private company in the new market area, has stopped driving rickshaws as the fare has doubled within three months and is no longer willing to meet the demands. requests for toys from her daughter.
“I also stopped going to social events for over three months.”
Zahirul Haque works for a non-governmental organization in Madhabpur of Habiganj as a field worker and earns Tk 10,000 per month.
A breadwinner of three, the 27-year-old says his financial situation has deteriorated over the past month and a half. As a result, he was forced to reduce his consumption of fish and meat.
His family ate fish 15 days a month and chicken meat once a month. Due to higher prices, the family only ate fish four times in July and no meat was purchased during the month.
Rui, Katla, climbers and tilapia fish cost 50-100 Tk more per kilogram than a year ago, while the price of broiler chicken has increased by 44%.
Haque also has to support his parents in their 70s, who have complications from old age.
“The cost of drugs has gone up,” he said.
“How long will I be able to meet the family expenses?” Haque said, adding that he had already borrowed Tk7,500 to meet the family’s expenses.
The junior officer at a bank in Natore says the monthly kitchen market bills have gone from Tk 2,500 three months ago to Tk 4,500.
This prompted her to reduce her consumption of fish and meat and to turn more to vegetables.
“We don’t buy any clothing items unless absolutely necessary. There are no purchases of cosmetics. We had to give up temporary household help.”
SM Nazer Hossain, vice president of the Bangladesh Consumers Association, said people on fixed incomes face a difficult reality.
Selim Raihan, an economics professor at the University of Dhaka, says many people on fixed and low incomes spend days in limbo because they don’t know if they will be able to meet household expenses in the future. next month.
Khondaker Golam Moazzem, research director at the Center for Policy Dialogue, thinks inflation has made significant jumps three times recently, respectively after the pandemic upswing, the outbreak of war in Ukraine and the latest fuel oil price hike.
As a result, the real incomes of fixed-income groups have fallen, but the fall is not fully captured by government inflation data, he said.
“So people are eating less and reducing their expenses. In the worst case, they might even compromise on nutritional intake.”
The renowned economist urged public and private sector employers to implement the annual wage increase in advance so that fixed-income groups can survive.