Greedflation: Hidden cause of high prices

Inflation has become one of the most pressing concerns for households across Bangladesh. From grocery bills to construction materials, prices have risen in ways that strain family budgets and squeeze small businesses. The dominant narrative attributes this trend to rising wages, global supply chain disruptions and currency depreciation. While these factors certainly play a role, they fail to explain a more troubling reality: the persistence of high prices even when global commodity costs are declining. A more uncomfortable but increasingly convincing explanation lies in what economists call "greedflation" -- the expansion of corporate profit margins during periods of economic uncertainty.

Over the past year, international prices of key imports such as edible oil, fertiliser and wheat have moderated compared with their earlier peaks. In theory, this should have translated into lower retail prices or at least slower price increases. Yet essential commodities, including rice, lentils, onions and cooking oil continue to remain expensive. This disconnect suggests that the problem is not merely external but deeply rooted in the country's market structure.

A major reason is the lack of genuine competition in several key industries. In sectors such as packaged food, cement, steel and pharmaceuticals, a handful of large conglomerates dominate supply chains. This concentration of market power allows firms to pass higher costs on to consumers when global prices rise, while showing little willingness to reduce prices when costs fall. Such asymmetric pricing benefits corporations at the expense of ordinary people and reflects rent-seeking behaviour rather than healthy market competition.

Unfortunately, the policy response has largely relied on macroeconomic measures such as interest rate hikes and tighter import controls. While these may help contain inflationary pressures, they also increase the burden on small businesses and middle-income households without addressing the underlying causes of price volatility. Equally concerning is the limited effectiveness of regulatory oversight. The Bangladesh Competition Commission remains under-resourced, while weak market monitoring allows anti-competitive practices and unexplained price persistence to continue with little scrutiny.

Addressing greedflation requires stronger competition policies, greater transparency in pricing and more effective monitoring of essential commodities. Encouraging new market entrants and supporting small and medium-sized enterprises would also help restore competitive balance. Inflation is not merely an economic issue; it is also a matter of fairness. If Bangladesh is to ease the burden on consumers, policymakers must look beyond conventional explanations and confront the structural weaknesses that allow excessive corporate profits to thrive at the expense of ordinary citizens.

Maiha Hossain

Dhaka

maliha.hossain02@northsouth.edu