Economic hardship seems to go uncontrolled

Md. Toufique Hossain :
South Asia is dealing with an unparalleled shock due to the impact of the Ukraine War and the Covid-induced pandemic. Bangladesh is not an exception to this where everyday necessity costs have increased to the level that are beyond the purchasing capacity of the average people. The county’s slowing growth emphasizes the need for nations to strengthen their resilience.
In addition, the Covid-19 catastrophe alongside global war has had an impact on the economic system. From last year to this year, the price of commodities has gradually increased. The average family’s income is nevertheless still at the same level as before. Most affected in this scenario are people with middle- and low-income levels. They must pay high prices for the commodities they need on a daily basis. By inflating the market crisis and profiting from the current situation faced by the nation and the general public, a number of dishonest traders are raising the cost of commodities. Administration officials are powerless to halt the increase in the price of these goods despite frequent market monitoring. Thus, the cost of basic commodities is two to three times higher for the average person. South Asian countries are struggling economically; some are doing better than others, with India’s recovery topping the world average and the Maldives and Nepal’s economy being mostly dependent on tourism. Sri Lanka is going through its worst economic crisis ever, while floods and Covid-19 have exacerbated Pakistan’s external imbalances.
The World Bank analysis revealed that “South Asia’s inflation, which is being driven by rising food and energy prices globally as well as trade restrictions that have exacerbated the region’s food insecurity, is predicted to reach 9.2 percent this year before gradually declining. Real income is consequently severely squeezed, especially for the region’s impoverished people who spend a significant portion of their income on food.”
Families in emerging economies can spend up to half of their income on food. Therefore, increases in food prices have a large negative impact on them. Food prices have been rising rapidly since the outbreak started in early 2020 as a result of supply chain disruptions, expensive shipping, and climate change.
Particularly in developed countries where the average people are better equipped to tolerate rising prices, inflation has recently made headlines all across the world. The cause for this is what economists refer to as a “supply shock,” which was caused by the conflict between Russia and Ukraine.
Moreover, sanctions on Russian oil and gas have also resulted in a decrease in supply and a shortage of fuel on the market globally, which has raised fuel prices globally. With the costs of food and fuel skyrocketing in the global market, inflation cannot be controlled so easily. In case of Bangladesh, the lower income groups are naturally struggling to support themselves and their family during times of price rise due to the on going war between Ukraine and Russia. Earlier people had to face severe hardships as a result of the 19-pandemic.
Daily necessities have undoubtedly been impacted by the rising of the dollar on the global market, price inflation, the Corona virus, and the Russia-Ukraine war, but in Bangladesh, traders have a habit of increasing prices right before Eid and Ramzan each year.
According to illustration attached here to this write up, in which World Bank estimates for GDP at constant market prices, the outlook for the Bangladeshi economy is not too awful. It appears to be 6.2 per cent for the fiscal year 23/24. In comparison to the other three South Asian countries, it is in a stable situation.
The Covid-19 pandemic hasn’t increased income, policymakers haven’t been able to keep the price of necessities under control, and the ongoing Russia-Ukraine conflict will have a significant influence on Bangladesh’s imports and exports. Now is the time for the government as well as the business sector to start preparing for the potential threat.
The government is doing everything it can to maintain prices of commodities reasonable during this Ramzan, but it must be ensured that the lower middle class and working poor are taken into account so that they have access to basic food items. Thanks to Prime Minister Sheikh Hasina’s government for arranging meetings with related ministry, corporate and wealthy individuals and for taking the initiative to provide rice, edible oil, lentils, sugar, and other essential products to the underprivileged through fair pricing cards.
In addition, to ensure social safety net programs, strict supervision, and market control are imperative in order to stop dishonest traders from raising prices illegally and stock up on daily necessities. In the upcoming national budget, it should also focus on the importance of the economic aspects which consider minimizing inflation by increasing employment, lowering imports, expanding the social safety net, stabilizing currency rates, and maintaining sufficient foreign reserves.

(The writer is a finance & economics researcher and NGO development activist. He is the author of the book ‘Bangladesh Share Market: Looking Ahead After Two Big Crashes’).