Soaring inflation is suffocating the FIXED INCOME GROUP

Everyone suffers except the upper class or the upper middle class. From this suffering, anger and frustration rise among them, especially those who are part of the fixed income group.

Golam Rahman President of Bangladesh Consumers Association

Shahed Alam has dented his savings to meet the extra costs of essentials. Parveen Sultana moved to a relatively cheaper apartment. Shahnaz Parveen has let go of her child’s guardian.

For all the latest news, follow the Daily Star’s Google News channel.

Although they live in different parts of the country, these people on fixed incomes are fighting an identical battle: rampant inflation without adjusting wages.

Along with hundreds of thousands of people in Bangladesh, they are experiencing a severe form of inflation. Daily essentials go beyond their reach. The price hikes eclipsed their monthly salaries following rising fuel prices, pushing up raw material prices, transport costs, medical expenses and education expenses.

Fixed income groups are particularly at much higher risk than other income groups because their wages remain the same despite the rising cost of living.

Bangladesh State Trading Company data shows that over the past year, the price of fine rice has increased by 12%, coarse rice by 8%, bulk flour by 67%, packaged flour 60 percent, coarse lentils 14 percent, bulk soybean oil 12 percent, bottled soybean oil 20 percent, sugar 33 percent and eggs 30 percent.

Banker Akram Hossain has to change rickshaws and buses three times to get to his office in Mirpur, Gulshan. After the increase in fuel prices, it costs him 90-100 Tk more than before every day.

He used to take carpool services for office work. On average, you have to pay 240-280 Tk more per day for this. Akram has stopped using ride-sharing services.

He said everything is now more expensive – transport costs, rice, pulses, oil, fish, meat, vegetables, spices, etc.

Even retail prices for fast-moving consumer goods are also rising.

A well-known brand of bath soap weighing 150 grams sold for 58 Tk a year ago. It costs 75 Tk now. A 500 gram packet of detergent that cost 60 Tk in January now sells for 90 Tk. In April-May this year, a 100 gram toothpaste sold for 70-75 Tk, which now costs 85-95 Tk, Akram said.

A well-known brand of bath soap weighing 150 grams sold for 58 Tk a year ago. It costs 75 Tk now. A 500 gram packet of detergent that cost Tk60 in January now sells for Tk90. In April-May this year, a 100 gram toothpaste sold for 70-75 Tk, which now costs 85-95 Tk.

Akram Hossain, a banker

In Dhaka, they are a family of four. Eight or nine months ago, the couple would walk and eat out on Fridays. They have completely stopped that for the time being.

Even at the beginning of this year, Akram used to send 7,000 to 8,000 Tk per month to his parents. It is now reduced to 4,000 Tk.

His wife Nasreen Zaman started school fees for Tk 3,500 per month.

With this money, she pays for vegetables and some other household expenses. In this way they try to survive in Dhaka even though it is difficult.

“In the past, I could save Tk 3,000 every month. Now I can’t save any more money,” she said.

Shahed Alam, who used to work at Kaumi Jute Mill Sirajganj, became unemployed like other workers after the government shut it down for suffering losses.

Taking loans from a bank, he bought an auto-rickshaw. He earns 500 Tk per day. But due to rising commodity prices, it is not possible for Alam to make ends meet with this income. He must therefore use his savings to meet the additional costs.

Alam said everything has become so expensive in recent months that it is now very difficult to feed his family with four children.

Parveen Sultana and her husband worked in private companies in Dhaka. They could save money after paying all the expenses.

For her travels, she used office transport; it would save him transportation costs. In this way, she was able to support her parents living in Brahmanbaria.

At the start of the year, his office shut down the transportation service. In May, the company fired her and others to cut costs.

“It became difficult for my husband to manage the family on his own. We have already moved to a cheaper apartment to minimize the pressure,” she said.

Inflation has been on an upward trend in recent months amid global supply chain disruptions and uncertainties stemming from the Russian-Ukrainian war.

Sultana said she didn’t have a brother. Thus, she has to take care of her elderly parents as the eldest child in the family.

With no income of her own, she supports her parents with her savings.

Speaking to the Daily Star, a number of bankers said depositors have already turned away from banks due to high inflation, and many are being forced to cut savings to meet the rising cost of living .

Shahnaz Parveen, a teacher at Dangapara in Natore, earns a salary of Tk 22,000. After meeting her family’s expenses, she could afford a tutor for her child. Recently, she let go of the tutor to reduce her expenses.

Her husband stopped using his bicycle to save fuel. She is now considering renting a house next to her school to save money.

“Everyone is suffering except the upper class or the upper middle class. From this suffering, anger and frustration are rising among them, especially those who belong to the fixed income group,” said Golam Rahman, chairman of the Bangladesh Consumers Association.

“The government should take measures to increase people’s income. The market surveillance system should be strengthened to reduce inflation,” he said.

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said that over the past year, food and non-food spending by the fixed-income group had increased significantly. But their incomes were not.

In this situation, they have to reduce the cost of entertainment, education and medical treatment. In doing so, they move away from their standard of living. This will lead to negative and intergenerational impacts.

Price increase over the past year

Bangladesh Bank data shows that deposit growth in the banking sector fell to 9.35% in June this year from 13.80% in June last year.


People in rural areas have been hit harder by food and non-food inflation than those in urban areas over the past two months, with headline inflation hitting a 10-year high of 9.52 percent in August.


It did, however, fall to 9.10% in September, but rural dwellers continued to feel the pinch as non-food inflation was close to 10% that month, according to data released by the Bureau of Statistics. from Bangladesh.


The weighted average deposit rate – which is calculated on the basis of the interest rate of all types of deposits offered by banks – stood at 4.07% in August. This means that the real interest rate was negative – 5.45% – while inflation was 9.52% that month.

Comments are closed.