Inflation inflates monthly family spending

People are forced to spend Tk 109.41 for consuming each of essential products against the price of Tk100 a year back for inflation uptick over the months, analysts say.
Every family requires spending thousands of takas in additional funds per month for the high inflationary pressure, market analysts and economists say.
Bangladesh Bureau of Statistics (BBS) has calculated the December inflation rate at 9.41 per cent on a point-to-point basis, up from 8.71 per cent at the same time a year before.
Based on weighted average for each of the 749 varities from 383 daily necessaries and services in the Consumer Price Index (CPI) basket, consumers needed to spend the Tk 9.41 additional amount of money in December last. The price was Tk100 a year ago in December 2022, an FE analysis has found.
The statistical bureau calculates CPI and the inflation on three price quotes per item with varieties collected from each of the market.
Both for rural and urban accounts, prices of 127 food items with 242 varieties as well as 256 non-food items with 507 varieties are collected.
For computation of CPIs, two consumer baskets are used (i) urban basket and (ii) rural basket. These basket items (goods and services) were determined based on HIES 2016-17 for private consumption of population.
BBS collects price data from 154 markets across the country, including 12 from Dhaka City, four from Chittagong, 18 from other six divisional towns, 56 from the rest 56 districts and rural areas.
The FE analysis has found that over the last three months, the rate of point-to-point inflation is on a higher trajectory being recorded at 9.93 per cent, 9.49 per cent and 9.41 per cent in October, November and December respectively.
The BBS laid highest weight average on some food and non-food items and services during their CPI and inflation calculation.
Among all the 749 varieties from 383 items, rice is the highest weight average-carrying product in the CPI basket, while fish, pulses, meat, vegetable, edible oil, milk, food products are also remarkable.
Among the non-food items and services, residential cost, cloths, education expenses, utility services, transportation, medicine, solid fuel, furniture equipment and petroleum products are remarkable in terms of higher weight average.
The CPI reflects the average change over time in the prices of a specified set of final commodities and services representing the market basket of a given group of consumers.
It classifies food and non-food CPIs for national, urban and rural groups in 12 divisions, including Food and Nonalcoholic Beverages; Alcoholic Beverages, Tobacco and Narcotics; Clothing and Footwear; Housing, Water, Electricity, Gas, and other Fuels; Furnishings, Household Equipment, and Routine Maintenance of the House; Health; Transportation; Communication; Recreation and Culture; Education; Restaurants and Hotels; and Miscellaneous Goods and Services.
Meanwhile, a big fall of inflation on food and beverages, clothing and footwear, and transportation prompted reduction in the overall inflation in December, BBS officials and analysts have said.
On the other hand, the higher inflationary trend in health services, education, and in miscellaneous goods and services restricted the fall of the inflation at an expected level in the month, they said.
The BBS in its latest data showed that the inflation in food and non-alcoholic beverages dropped at a significant rate.
It calculates the inflation based on the "Classification of Individual Consumption According to Purpose (COICOP) method.
On point-to-point basis, the inflation rate for the food and non-alcoholic beverage division increased to 9.58 per cent in December last from 7.91 per cent a year back in December 2023.
However, the rate of inflation for the clothing and footwear division also increased to 8.49 per cent in December from 7.05 per cent in the corresponding period.
There was a big jump in the rate of inflation in the Housing, Water,
Electricity, Gas, and Other Fuels division as it swelled to 10.58 per cent in December from 7.04 per cent in the same period last a year before, the BBS data showed.
The pint-to-point inflation in the Furnishings, Household Equipment, and Routine Maintenance of the House division also jumped to 13.34 per cent compared to 10.79 per cent in the same period a year before.
A private banker, Hafizul Islam, told the FE he has been struggling with his family expenses as he has to spend some additional Tk 11,000-Tk 13,000 per month for getting the daily essential items like rice, vegetables, fishes, educational services, utility bills.
"I have not got salary hike over the last few months but my expenses only for availing the basic items have swelled. I am really struggling very much with my five-member family. The inflation hit hard severely," he adds.
Former World Bank economist Dr Zahid Hussain says the higher inflation is undermining the living standard of the fixed-income group.
Besides, the vulnerable groups might become poor due to the higher CPI index trend in the country, he adds.
"If the income-growth rate becomes lower than the inflation rate, then the vulnerability of the people will increase and many will fall behind the poverty line," Dr Hussain told the FE.

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