Mid-income families reel under persistent inflation

UNB:

Despite a recent marginal dip in the national inflation rate, persistently high prices continue to inflict significant hardship on lower and middle-income households across Bangladesh, severely eroding their purchasing power and forcing many to seek alternative income sources.

The prolonged period of soaring costs has made every essential purchase a test of resilience for families whose incomes often struggle to keep pace with the rising cost of living.

Kawser Mia, a private sector employee in Tejgaon, exemplifies the escalating financial strain. In 2016, he borrowed Tk10 lakh from a bank at an 8 percent interest rate to repair his village home in Mirzapur, Tangail. Today, his loan installment has surged to a daunting 15 percent interest, nearly double the original rate.

“The loan installment has increased severely, now consuming around 65 percent of my salary,” Kawser lamented. “It was flexible when I first borrowed, but now it has become very burdensome.”

To cope with the drastically increased payment and other family expenditures, Kawser has been forced to work as a street vendor after his regular job.

He, like many others, finds himself in distress due to the impact of inflation adjustments in the banking system, which have led to higher interest rates for consumers. This situation has driven many middle and low-income individuals to seek additional employment, with some turning to street vending in Dhaka and other cities.

Inflation’s Broad Impact:
SM Nazer Hossain, vice president of the Consumers Association of Bangladesh (CAB), told UNB that inflation has adversely affected the living standards of both service holders and farmers in urban and rural areas. Despite CAB’s efforts to advocate for lower consumer goods prices, food costs remain elevated, often attributed to hefty production expenses.