THIS is highly worrying that inflation, especially food inflation, has pushed about 10 per cent of the population, 1.78 crore people, either into poverty or at risk of poverty in 2022–2024. A Research and Policy Integration for Development study has also identified that the segment of people living in extreme poverty has increased from 5.65 per cent in 2022 to 7.95 per cent in 2024, with 38.2 lakh more people struggling to meet their most basic needs. Besides, moderate poverty has also seen a sharp increase — from 18.22 per cent to 22.95 per cent — while people classified as vulnerable or at risk of falling below the poverty line have grown from 33.9 per cent to 39.8 per cent. Persistent inflation, coupled with stagnant wages, has put the low-income people in a tight spot.
Inflation has, keeping to even the conservative Bureau of Statistics figures, remained near or over double digits for two years. In November, the overall inflation rate reached 11.38 per cent from 10.87 per cent in October while food inflation reached a record high of 14.63 per cent in urban areas and 13.41 per cent in rural areas that month. The study has rightly pinned the failure to fight inflation to the contradiction between a contractionary monetary policy and an expansionary fiscal policy. The state of poverty is also evident in the World Bank food security update. The update, which covers from May 2023 to May 2024, says that the persistent high food inflation has pushed the large majority of low- and fixed-income people into food insecurity and puts Bangladesh in the red zone, where food inflation ranged between 5 per cent and 30 per cent. The study also says that the previous government, toppled in a mass movement, manipulated data to portray a good growth and wrongly attributed high inflation to global energy and food price increase and the Russia-Ukraine war. The government measures to help the poor also failed largely because of wide-scale irregularities. The recent white paper on the state of the Bangladesh economy shows that 73 per cent of social safety net beneficiaries were non-poor.
The government needs to attend to a number of issues and adopt policies to fight inflation and poverty. Beginning with right economic data, the government needs to balance the monetary and fiscal policies, monitor the market, increase social safety allocation and reach benefits to the deserving.