Struggling to make ends meet: Household expenses soar

Private firm employee Enamul Hossain, who lives with his family of four in Dhaka’s Shahjahanpur area, has been struggling to manage household expenses despite a slight salary increase at the beginning of the year. The cost of living has risen significantly, impacting every sector, from house rent and utilities to groceries and children's education. Enamul is no longer able to send money to his parents in the village due to his own financial strain.

"The market costs have increased the most. Previously, our monthly grocery bill was between Tk 7,000-8,000; now it's Tk 10,000-12,000. Items like soap and toothpaste cost Tk 500-600 more than before. House rent has increased by Tk 1,000 compared to last year. Monthly expenses for electricity, gas, cable, and water bills have risen by about Tk 700-800," Enamul explained.

Additionally, Enamul's commuting costs have increased by Tk 500, the fees for his children's private tutor have risen by Tk 1,000, and the salary for the housekeeper has gone up by Tk 600. School fees, mobile bills, and internet costs for his children have also increased by around Tk 1,000.

"The family’s expenses now total about Tk 50,000, which is more than my salary. As a result, we’ve had to dip into our savings. I used to send some money every month to my parents in the village, but I can’t even do that anymore," Enamul lamented.

Enamul's situation is not unique. Many people are finding that their expenses far exceed their income, with inflation making it increasingly difficult to manage household budgets. Over the past few weeks, the prices of various daily necessities, including rice, have risen, leaving lower and middle-income families struggling to make ends meet.

Feroza Begum, a widow living in a two-room house in Rampura with her two children, works for a private company. She echoed similar sentiments, noting, "Expenses are increasing in all sectors. My salary increment last year was only Tk 1,500. Running a family is becoming difficult now. Monthly expenses have increased by around Tk 5,000-7,000."

When asked how she is managing the additional costs, Feroza said, "We’ve had to cut back on food. I walk back from the office, and my children walk to school. We aren’t buying any extra clothes."

Conversations with various residents in the capital reveal that fixed expenses for families have increased mainly due to house rent, children’s education, transportation, and the cost of gas, electricity, and water. Food inflation has also had a major impact on overall consumption.

Aminul Haque, a resident of Segunbagicha, shared, "The price of daily commodities has risen so much that it’s impossible to save money on transportation. The wages for domestic workers have also increased."

Residents in some areas have reported additional costs for cable and internet fees, as well as garbage disposal services.

Kawsar Hossain, a resident of Khilgaon who meticulously tracks his expenses, stated, "Earlier, I used to recharge Tk 800 in the electricity meter, but now even Tk 1,000 doesn’t last a month. The gas cylinder that cost Tk 1,200 last year now costs Tk 1,450. The house owner has started charging Tk 600 for water bills. Cable TV and internet bills have increased by Tk 200."

Regarding grocery prices, Kawsar added, "The price of rice has increased by about Tk 500-700 per bag in one year. No good fish can be found for less than Tk 400-500 per kg. Vegetables are now no cheaper than Tk 80 per kg. Onion costs Tk 130 per kg, ginger-garlic Tk 300, and potatoes Tk 60 per kg. The kitchen-market cost has increased by Tk 2,500-3,000 this July compared to last year."

Annual average inflation around 10%

The price inflation situation aligns with these accounts. The highest inflation rate in 13 years has been recorded, with the annual average inflation in the last fiscal year reaching 7.73 per cent, and food inflation surpassing 10 per cent in seven of the last 12 months. Despite the government’s target to keep inflation at 6 per cent, the situation has worsened.

The Bangladesh Bureau of Statistics (BBS) reports that wages have increased by 7.95 per cent, but the scope of employment has not expanded. As of January-March, the number of unemployed stood at 2.59 million, compared to 2.47 million at the end of 2023.

Khandkar Golam Moazzem, Director of Research at the Center for Policy Dialogue (CPD), stated, "Actual inflation is higher than reported. People are unable to reduce expenses. Those who have savings are depleting them, while others are forced to consume less and reduce purchases of essentials."

Part-time work to cover additional expenses

An anonymous individual from Hatirjheel shared, "I do small jobs. After office hours, I sell tea from 10:00pm to 11:00pm, earning about Tk 300-400. There’s no other way. Without extra income, it’s impossible to run the family."

Challenges in purchasing daily essentials

The biggest issue is the exorbitant prices of daily commodities. Prices of essential items like rice, eggs, and potatoes have increased significantly. Medium-quality rice costs Tk 60 per kg, potatoes Tk 60-65, and onions Tk 120. Vegetables are not available below Tk 80 per kg.

According to the Trading Corporation of Bangladesh (TCB), the prices of most tracked items have increased. The price of rice has risen by 7 per cent, pulses by 50 per cent, and onions by 150 per cent. Fish, meat, eggs, and milk prices have also seen significant increases.

Long-term effects

Golam Rahman, President of the Consumers Association of Bangladesh (CAB), noted, "People’s expenses are increasing without alternative income sources. The income inequality gap is widening, causing social discontent. Malnutrition is also on the rise due to high inflation, which impacts the lower and lower-middle classes' performance and has long-term consequences. The government needs to increase income opportunities and rein in inflation."

Ahsan H Mansoor, executive director of the Policy Research Institute (PRI), said, "Bangladesh’s inflation issues stem from wrong policies, such as printing money to keep banks afloat and maintaining low-interest rates during the pandemic. While it’s challenging to reduce current prices, future inflation can be controlled by stabilising the dollar rate and avoiding new money printing."

The current economic scenario highlights the urgent need for effective policy interventions to manage inflation and support the lower and middle-income classes in coping with rising living costs.

NH/NMA