Multidimensional pressures on the economy: The purchasing power of the common man is collapsing

Economic Desk

The country’s economy is under severe pressure. For the last 44 months, the wages of the workers have not been able to keep pace with inflation, as a result of which the purchasing power of the lower and middle classes has been gradually decreasing. The common man is disoriented by the uncontrollable increase in food, rent and transport costs. Many families are now sparing their savings to support their families, and are even forced to cut back on food and education costs. In this situation, the financial discipline of low-income people has collapsed. They see darkness in their eyes. Economists have expressed concern over the rise in the number of people without food insecurity in the country.

According to the latest data from the Bangladesh Bureau of Statistics (BBS), the average wage increased by 8.02 per cent in September 2025, but the overall inflation was 8.36 per cent in the same period. That is, the deficit in real income has increased. The rate of wage growth has been steadily declining for the last three months. It was 8.19 per cent in July, 8.15 per cent in August and 8.02 per cent in September.

Dr Zahid Hossain, former chief economist of the World Bank, said, “Workers are now under pressure from both sides, on the one hand, prices are rising, and on the other hand, wages are increasing. It’s like hitting the head and legs together. ’

He said the rate of wage growth has decreased in all the divisions of the country in September, of which Khulna division has seen the highest decline.

Dr Mohammad Lutfar Rahman, a professor of economics at Jahangirnagar University, said, “The slowdown in wage growth indicates a deeper weakness in the economy. Investment and employment have declined, and political uncertainty has further complicated the situation. ’

According to the BBS, overall inflation rose to 8.36 per cent in September, which is higher than the previous month. The prices of rice, pulses, oil, vegetables, medicines and house rent are increasing steadily. People’s real purchasing power is decreasing due to lack of income. Many people are now running their families by breaking their debts or savings. They are struggling due to the lack of wages and high prices of daily commodities.

According to economists, long-term high inflation is slowing down consumer spending, which could create a demand contraction in the overall economy in the future.

According to the Food and Agriculture Organization (FAO) of the United Nations, the number of people suffering from food insecurity in the country has increased to about 23.6 million by the end of 2024. About 7 million people have increased in one year.

The cost of food, housing, medicine and transportation has been rising steadily for the last three years.

A retired government official said, “Earlier, the family used to run on Rs 30,000 a month, now it costs Rs 45,000 to buy the same thing. ”

According to the BBS, the country’s GDP growth fell to 3.69 percent in the last fiscal year. This is the lowest in the last five years. The International Monetary Fund (IMF) in its latest report has lowered Bangladesh’s growth forecast for the fiscal year 2025-26 to 4.9 percent from 5.4 percent.

Private sector investment has also come to a standstill. According to Bangladesh Bank data, private sector credit growth in August was only 6.35 percent, the lowest in the last 22 years.

Taskin Ahmed, president of Dhaka Chamber of Commerce and Industry, said, “High interest rates and political uncertainty are discouraging entrepreneurs. If stability returns, investment will accelerate. ’

According to the BBS labor market survey, the unemployment rate in the country is 4.63 percent. That is, the number of unemployed people is about 27 lakh. One in six young people is unemployed.

According to the ILO, new job opportunities in the labor market have almost stopped due to investment stagnation and declining export orders.

Due to high inflation and contraction in income, people have reduced the purchase of savings certificates. Sales of savings certificates fell to Rs 289 crore in August 2025, down nearly 88 per cent in a year.

According to economists, “People are now struggling to keep the money in hand. As a result, the government’s internal debt system is also under pressure. ’

According to the Export Promotion Bureau (EPB), the country’s export earnings declined in August and September. A 3 per cent decline in August, a further 4.61 per cent in September. Readymade garments, agricultural products, jute products and home textiles sectors are the most affected.

According to the World Bank’s ‘Bangladesh Development Update 2025’ report, another 3 million people could fall into extreme poverty due to the ongoing economic slowdown. According to the BBS, the country’s poverty rate has increased by 21.2 percent, which is about 2.5 percentage points higher in a year.

Economists say the country’s economy is now not only economic but also immersed in social crises. When purchasing power decreases, consumption decreases, demand decreases, production and employment decreases.

According to them, the need of the hour is to increase wages and control inflation, reform the market and supply chain system, increase food and cash support for low-income people, and ensure political stability.