Inflation, Fuel Crisis, and Earnings Stagnation Crush Lower and Middle Classes

❐ Staff Reporter

Expenses – this one word seems to have stuck in the lives of ordinary people. As soon as they enter the market, they are hit by the increase in the prices of daily necessities, and the lower and middle classes are struggling to cope with that shock. Along with food, hospital bills, school and college fees, transportation expenses, and house rent have increased. Yet, people’s income is not increasing in comparison.

This situation has been further complicated by the fuel crisis caused by the war in the Middle East. The cost of transportation has increased due to fuel prices and supply problems, which has a direct impact on the prices of daily necessities. Those who depend on wheels for their livelihoods are the ones who are suffering the most.

There are about one million people involved in the ride-sharing sector in the country. The number of drivers registered with Pathao and Uber is several lakhs. Due to the fuel crisis, they often have to wait in long lines for fuel, resulting in a large part of their working hours being wasted and their income decreasing. At the same time, traders have also faced losses due to the decision to close shopping malls and markets by 6 pm.

From the capital to the district towns, the picture is the same everywhere. Many people are buying less essential goods when they go to the market, while some are returning empty-handed. While it is difficult to meet the daily needs of the family, ensuring nutritious food is becoming even more difficult.

The situation in the medical sector is most worrisome. Every year, about 5 million people in the country fall into poverty while trying to meet medical expenses. Many are taking loans or borrowing at high interest rates, and are later forced to make difficult decisions like selling their land to repay the loans.

Despite all this expenditure, desired medical services are not being provided in many cases. The recent deaths of 37 children infected with measles and another 174 children with symptoms have brought to the fore the fragility of the country’s health system.

The same pressure is evident in the education sector. Parents are struggling to meet the costs of their children’s education. School fees, coaching, private tutors, and books—all of which have increased by 60 to 90 percent, especially at the secondary level. As a result, many poor families are being forced to stop their children’s education.

A private study has found that nearly half of students are currently dropping out at some point, the main reason being poverty. According to UNESCO, the average cost of education has increased by nearly 80 percent, and about 7 percent of families are forced to take out loans to send their children to school.

Meanwhile, private sector employees are facing the most hardship due to the increase in rent, transportation and other daily expenses. Their salaries are not increasing much, while expenses are increasing every month. As a result, many are breaking their savings to meet their expenses, while others are becoming dependent on loans.

Although inflation has decreased slightly according to official figures, there is a big difference with the real situation. According to the Bangladesh Bureau of Statistics, inflation in March decreased to 8.71 percent, which was 9.13 percent in February. Food inflation was 8.24 percent and non-food inflation was 9.09 percent. The pressure on the non-food sector was higher due to the increased demand for various products, including clothing, centered around Eid.

On the other hand, the national wage growth rate during the same period was 8.09 percent, which is lower than inflation. As a result, real income is falling—even though people have money in their hands, that money is not getting the goods or services they used to.

Economist Mustafa K. Mujeri said that the country is currently experiencing high inflation, which is close to 9 percent. Due to the increase in spending in all sectors, starting from daily necessities, people from all classes – the lower, lower-middle and middle class – are under pressure, especially those with fixed incomes.

He further said that economic growth has slowed down and employment opportunities have also shrunk, resulting in a clear deterioration in the quality of life. Along with the increase in expenditure in the health sector, the weaknesses of the system are also being exposed. Similarly, the increase in the cost of education is causing many students to drop out, which is a major risk for future human resource development.

Overall, the common people of the country are going through a difficult time under the combined pressure of inflation, income stagnation, energy crisis, and rising social costs—which is having an impact on their current lifestyle as well as future generations.