Inflation impact on the poor is much higher than official data, says CAB chief Ghulam Rahman

The consumer advocate said that the poorer sections of society are suffering more because the price of necessities has shot up

Masum BillahShoumik
Published : 21 May 2023, 03:30 PM
Updated : 21 May 2023, 03:30 PM

The real impact on the cost of living and the struggles of the lower middle classes are more intense than the 9 percent inflation rate calculated by the statistical agency, says Ghulam Rahman, the president of the Consumers Association of Bangladesh. 

The calculations made by the Bangladesh Bureau of Statistics are based on a large basket of commodities, but lower-income people consume 20 or 25 commodities, the consumer advocate said. 

“The price rise of those is much higher than the average of, say, 200 commodities. So, the actual impact on the average consumer is much higher than what is calculated by the Bureau of Statistics,” he said. 

Rahman joined Inside Out to discuss the causes of inflationary pressure and what can be done to help consumers. Video of the interview is available on and its Facebook and YouTube pages. 

A number of factors are contributing to the current inflation, said Rahman, who worked at the Anti-Corruption Commission and the Bangladesh Energy Regulatory Commission in his previous roles. 

There are international factors which are beyond the control of the government. To counter the inflationary pressure generated abroad, the government must take some monetary measures, Rahman said. “All the world’s central banks are raising interest rates. We are not doing that here.” 

“We, on the other hand, are borrowing from the central bank. The finance ministry is borrowing from the central bank. In the newspaper, I saw that it is almost Tk 700 billion. Borrowing from the central bank is actually printing money and it has a multiplier effect.” 

“If too much money runs after too few goods, prices will go up.” 

Another major factor is the weakening of the taka. The taka has depreciated as much as 30 percent in a year against the dollar, which means the prices are much higher in Bangladesh than a year ago even if international prices of many commodities are now coming down, he said.


Asked why the government’s efforts to fix the prices of necessities have not worked and consumers are still being overcharged, Rahman said, “In Bangladesh, we practise a free market economy. In a free market economy, administered price is difficult unless the price decision is backed by adequate supply.” 

“In cases of sugar and edible oil, the suppliers are very few, the refiners are very few. So they can control the supply. If the prices are fixed by the government, and that is not backed by adequate supply by the refiner, then it does not work.”

The government does not consult consumer advocates when fixing a price, he said. “We have discussions with the government on many issues. We represent consumers in many committees. We take part in public hearings of energy prices, gas, and electricity. But for the fixing of prices by the commerce ministry on the basis of the recommendations of the Tariff Commission, we are not consulted.” 

“We’ve put forward many recommendations, but the ultimate decision is of the government.” 

“In the government, things are done on the basis of lobbying power. At this moment, the lobbying power of the business people is much more than that of consumers and any other group.” 


Rahman believes that the way to ensure fair prices for consumers under the current economic system is to encourage competition and bolster supply. However, the regulators overseeing this crucial job are inadequate for the task, he says. 

“The Competition Commission is supposed to check whether there are unethical practices or lack of competition. But it is not functioning as we expect. They should be more active. That’s the least I can say. They are not doing enough.” 

“A fair price can be achieved only through competitive marketing of products and adequate supply. At this moment, the lack of fair competition in the market is the biggest problem.” 

Even when some groups break the law to drive up prices, little is done, the consumer advocate said. The enforcement of the law is weak, he said. 

“Our legal process is complex and lengthy, but if some wrongdoers are brought to task, things will get better.”

“If somebody tries to disrupt supply, then [the business entity] should be brought to justice in accordance with the law. In Bangladesh, what is happening in the name of a free market economy in most trade of commodities, the few are dominating. So, there is an oligopolistic situation. If an oligopoly is not controlled by the authorities, they can rule the market. They can dictate the price." 

In some cases, it would be best for Bangladesh to consider a more active role of the government in supplying necessities, Rahman said. 

“We should think about practising mixed economic model instead of free market philosophy. The government should play a bigger role in supplying or producing or importing essential commodities,” Rahman said.