Essential goods now luxurious in Bangladesh: CPD - The Business Standard

The cost of essential goods in Bangladesh has escalated to the point of becoming luxury items, with food prices rising disproportionately compared to income levels, the Centre for Policy Dialogue (CPD) said today (2 June).

The private research organisation also noted that these price increases are driving the poor deeper into poverty.

"The government's efforts to manage the situation are deemed insufficient, with social security remaining low. Reduced import tariffs do not benefit consumers; instead, the advantages go to importers," CPD Research Director Khandaker Golam Moazzem said during the presentation of the "Bangladesh Economy 2023-24: Third Interim Review" in the organisation's office in the capital's Dhanmondi.

Golam Moazzem said the economy is undergoing a severe crisis, worsened by policy weaknesses, poor governance, and inadequate reforms. This has resulted in low revenue collection, reduced fiscal space, increased government borrowing from banks, and a declining foreign currency reserve.

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"The situation is not new but has persisted into the current fiscal year, prompting the government to follow IMF recommendations, including adopting market-based exchange and interest rates," he added.

The CPD research director said Bangladesh's inflation rate is higher than Sri Lanka's.

During the presentation, Golam Moazzem highlighted that Bangladesh has the highest food expenses despite being a lower-income country.

The CPD research director also presented data from 2019 to 2024, showing significant price increases for basic necessities.

"Over these five years, the price of rice increased by 17%, with the price of coarse rice rising by 30% and the paijam variety by 15%," he said, adding that rice prices have risen more sharply for poorer segments compared to those for the wealthier segments, mainly because the rice they consume is sold more frequently

Golam Moazzer further noted, "Lentil prices have surged by 95%, flour by 40%, loose flour by 54%, all-purpose flour (moyda) by 60%, loose soybean oil by 84%, and bottled soybean oil by 54%. The price of palm oil has skyrocketed by 105%.

"The price comparison between local and international markets shows that local consumers are paying significantly more for the same quantity of commodities. For instance, while the international price for a litre of soybean oil is Tk105, it costs Tk163 in Bangladesh," he added.

The CPD research director said despite lesser increases in the prices of locally produced fish, significant increases were seen in the prices of beef (57%), broiler chicken (60%), local chicken (55%), and sugar (160%).

The current price of sugar in Bangladesh is Tk130 per kilogram, compared to Tk39 per kilogram in the European market, he added.

He said the prices for powdered milk increased by 43-80%, garlic by 210%, dried chili by 110%, and ginger by 205% over the last five years.

Noting the widespread public demand, the CPD research director hoped that the upcoming budget would stabilize the country's macroeconomy and tackle the challenges faced by ordinary people through necessary reforms.

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