People are earning less, but spending most on food in Bangladesh, creating grave difficulty for the poorer sections of society.
The research director of the Center for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem said this in a media briefing on “Bangladesh Economy 2023-24, Third Interim Review” held at CPD office in Dhanmondi on Sunday.
In a keynote presentation, he said, “We have become a luxurious country. We earn less, but spend the most on food. The victims of which are the poor and common people. What economy are we in?”
The government efforts are there. Many times the tariff on essential commodities is reduced, benefiting one type of trader, he said.
Pointing out that the disparity between the rich and the poor has increased, he said,
“Currently the per capita domestic income is $2675, and the per capita national income is $2784. The average per capita income that we got was mainly due to the high earners. Considering the poor people, their income has decreased.”
“Discrimination has widened here. Private investment is not visible. Excessive borrowing by the government is a major reason. The government should control the matter. The government’s investment target of 7.5 per cent is not expected to be achieved,” said Moazzem.
He said the economy is undergoing a severe crisis, worsened by policy weaknesses, poor governance, and inadequate reforms. This has resulted in low revenue collection, reduced fiscal space, increased government borrowing from banks, and a declining foreign currency reserve.
In the keynote presentation Moazzem said, “We are at 9 and 10 per cent inflation. Currently, it is more than Sri Lanka. Failure to control inflation is a major failure for the government.”
For example, compared to 2019, the price of miniket rice has increased by 17 per cent, pajam rice price by 15 per cent and coarse rice by 30 per cent. That is, where the profiteers are making more profit, the products that the poor and middle class consume and sell more in the market, he said.
He said the price of lentils (masoor dal) rose by 95 per cent, wheat 40-54 per cent, flour 60 per cent, open soybean 84 per cent, bottled soybean 56 per cent, and palm oil 106 per cent. The price of beef is also high, broiler chicken is 60 per cent raise, sugar price 152 per cent, powdered milk 46-80 per cent, onion 164 per cent, garlic 310 per cent, and dry chilli 105 per cent, which is much higher than the international market.
“We see weakness in the market and supply monitoring system,” said Moazzem.
He said, GDP growth was estimated at 7.5 per cent. But in January it revised to 6.5 per cent. Various international organisations, including the IMF, have estimated it is even lower.
“The government is far from the budget target. The employment trend is not increasing with the growth of GDP, rather decreasing. National income is increasing in GDP, but is not contributing or contributing less to employment,” he said.
Regarding the revenue target, Golam Moazzem said, “We can see a 13 per cent growth in revenue collection, which is in a good position as July-January last year. Last year was negative.”
“If the target of revenue is to be achieved, then 63 per cent growth must be achieved, which is impossible to achieve,” he pointed out.
Other members of CPD’s research team were also present in the briefing.
