Cycle of inflation, hunger pushing Bangladeshis into extreme hardship

The South Asian country falls to 84th position in the Global Hunger Index, down three places from last year

Amid the rising cost of living, more people in Bangladesh are finding it harder to make ends meet.

A man selling leftover mutton korma and pilau near Mohakhali fresh market opened up about his daily battle against life’s rising tide.

Nearby, Zahid Uddin, a day labourer, was haggling over the price of pilau. His struggle was etched on his face.

“I live in Korail with my family. My rent has doubled in two years, but my earnings have stayed the same. I have two children. Costs just keep climbing. I have not been able to buy beef for ages. I hoped I could afford some here,” Zahid shared, his voice heavy with resignation.

On Thursday, a long line snaked near the Trading Corporation of Bangladesh, or TCB, truck in Tejgaon industrial area.

Among the crowd was 60-year-old Rahima Khatun, her face a mix of exhaustion and quiet despair. She had been waiting for hours, clutching hope for a little relief.

“I stood in this line to save a few taka, but everything is already gone,” she said, disappointment evident in her voice. “I have no one—no husband, no children. Prices keep rising, and survival feels impossible,” added Rahima, who lives in a cramped seven-storey slum.

Rickshaw-puller Omar Faruq from the same area shared a similar experience.

“What I used to earn was enough to get by, but now the costs are rising while my income remains the same. It’s a struggle, and saving money is not an option,” Faruq said.

The economic hardship brought on by inflation has become a year-long ordeal for many.

Some essential goods have been disappearing from markets or seeing drastic price hikes.

The situation is reflected in recent statistics.

In the Global Hunger Index, Bangladesh dropped three places, now ranking 84th out of 127 countries.

This year, Bangladesh scored 19.4, indicating a moderate level of hunger, a stark decline from the previous year’s score of 19, which had placed the country at 81st.

The report, jointly prepared by Welthungerhilfe Bangladesh and Concern Worldwide, highlighted that 23.6 percent of children in the country are facing stunted growth due to malnutrition.

The report also pointed out that 11.9 percent of the population is undernourished, while 2.9 percent of children die before reaching the age of five.

Malnutrition is stunting growth in 23.6 percent of children under five, meaning they are not growing in height according to their age.

Meanwhile, 11 percent of children under five face physical development issues, including poor weight gain relative to their height.

The World Food Programme, or WFP, report published on Oct 9 said 36 percent of low-income people in Bangladesh are food insecure.

Due to the August floods, 37 percent of households reported a decline in income, further exacerbating food security concerns.

The report also indicated that 20 percent of the country's population is facing food insecurity.

Rising prices have forced 30 percent of families to consume less food than required, and 42 percent have been compelled to borrow money to buy food.

Moreover, 26 percent of families have reduced health-related spending, and 17 percent have exhausted their savings.

According to the Bangladesh Bureau of Statistics, or BBS, the monthly cost of maintaining a healthy life with the required daily food energy intake, 2,100 kilocalories, should be Tk 1,800.

This amount has been officially defined as the food poverty line.

However, a WFP report published November 2024 indicates that the current monthly expenditure per capita for minimum food intake has risen to Tk 3,051.

This represents a 69.5 percent increase over the food poverty line for maintaining a minimum healthy diet.

Despite repeated interest rate hikes to control inflation, the impact has not been felt in the prices of essential commodities.

Inflation rose to 11.38 percent in November, with food inflation nearing 14 percent.

Meanwhile, the latest national wage growth rate stands at 8.10 percent, consistently lagging behind inflation rates nearly every year.

Despite the declining poverty rate in government statistics, insufficient wage growth compared to rising commodity prices has pushed an additional 17.8 million people, or 10 percent of the population, into poverty or at risk of poverty over the past two years, according to a teacher from the economics department at Dhaka University.

At a workshop organised by the private research institution Research and Policy Integration for Development, or RAPID, in Dhaka on Dec 15, Md Din Islam, an associate professor in the economics department at Dhaka University, shared these findings.

He said in two years, 7.86 million people have newly fallen below the tolerable poverty line, with another 9.83 million people facing extreme poverty risk.

During this period, 3.8 million people have descended from poor to ultra-poor status.

This research did not involve any field surveys but was calculated considering average inflation and wage growth rates.

The institution used purchasing power to determine the internationally recognised poverty and extreme poverty lines.

Analysing the BBS data on inflation and real wages, researchers found that in the fiscal year 2023-24, over 6 percent of people lost their purchasing power, resulting in new poverty or increased poverty risk.

According to the latest BBS data, the poverty rate is currently 18.7 percent, based on the 2022

The Household Income and Expenditure Survey 2022 revealed these figures.

In comparison, the 2016 survey recorded a rate of 24.3 percent.

The most recent report shows that the extreme poverty rate in 2022 has dropped to 5.6 percent, from 12.9 percent in 2016.

Din Islam attributed inflation to government policy mistakes, noting that the central bank increased the money supply by Tk 1 trillion in a year through loans or money printing, leading to an increased circulation of money in the market.

Zahid Hussain, a former lead economist at the World Bank's Dhaka office, said: "Food inflation has become a significant concern. Such high levels have not been seen in recent times. If this is not brought under control, the options to overcome the situation become quite limited.

"Since the impact is most severe on low-income families, budgetary support for them needs to be increased to help them cope with inflation. If inflation could be reduced, the problem would be resolved right there."

Advising on reducing both food prices and inflation, he said: "A decrease in the inflation rate alone will not suffice because wages are not increasing. For over 36 months, the inflation rate has risen much faster than the wage growth rate in sectors like agriculture, services, and industry.

"Even the wages of skilled workers have not kept up with inflation. The growth rate is lagging by two to three percentage points. Where inflation is at 9 percent, their growth rate is perhaps 6 percent. For low-income families, reducing food prices is as crucial as lowering inflation."

Hussain suggested increasing the size and scope of social safety net programmes, saying: "The allocations for these programmes aimed at supporting low-income families need to be enhanced, both in terms of the amount and the scope."

He emphasised the importance of controlling corruption and mismanagement, saying: "What I find most crucial is addressing the corruption and mismanagement that we have seen in the past, which often prevented aid from reaching its intended recipients.

"Whether it's the family card system or cash assistance programmes in the social safety, health, and education sectors, or programmes under the Ministry of Women and Children Affairs and the Ministry of Labour and Employment, all target low-income families. But the funds often go elsewhere. Improving this management to ensure the aid reaches those for whom it is intended is essential. We need to curb food inflation and simultaneously enhance the capacity to deal with it."

Fahmida Khatun, executive director of the country's leading think-tank, Centre for Policy Dialogue, or CPD, said: "Employment opportunities must be created so that people have money to purchase goods from the market.

"For those who are poor and unable to work, social security is necessary. Its scope and the amount allocated need to be increased. The volume of OMS and TCB initiatives must be expanded because we see long queues, and not everyone is receiving an adequate amount."

She also stressed the need to control the prices of essential commodities, saying: "Even if people have money, not everyone can buy everything due to the severe inflationary pressure, which continues to rise. The most important task now is to rein in inflation and bring the prices of essential goods within the reach of the general public."

[Writing in English by Arshi Fatiha Quazi]