Price Hike Effects in Bangladesh
Introduction
The recent increase in the price of food, especially rice, has been a cause of concern all over the world and has been critically important issue in Bangladesh; as a net importer of food, the price has closely followed the trend of international markets. The result of this unusually high rate of inflation has had a direct bearing on the poverty status of the country as the incidence of poverty is intimately related to the change in food prices due to the fact that food constitutes a considerable portion of the expenditure of the poor.
Several studies have assessed the impact of food price increase on the level of poverty in Bangladesh. According to the World Bank (2008), a reduction in poverty by 5%, between 2005 and 2008, was expected in Bangladesh resulting from the strong GDP growth during that period. However, the study instead projects around a 3% increase in the incidence of poverty from the baseline rate of 40% in 2005 as a result of the increase in food prices. Therefore, the net impact on poverty, from the combined effects of economic growth and the inflation of food prices, is likely to result in a decline of about 2%; from 40% in 2005 to 38% in 2008. On the other hand, the Centre for Policy Dialogue (CPD) estimates that in fact an additional 8.5% of households have actually fallen below the poverty line because of the high inflation (CPD 2008). Their estimates take the Household Income Expenditure Survey of 2005 as the benchmark, and their projection considers the increase in cumulative Gross National Income (GNI). However, they concluded that the cumulative impact of high inflation (particularly the weighted inflationary impact of the price of rice) has resulted in significant income erosion of the low income groups in Bangladesh.
ABSTRACT
THE MAIN REASONS AND
PUBLIC’S REACTION ABOUT RECENT PRICE
HIKE IN Bangladesh
“THE MAIN REASONS AND PUBLIC‟S REACTION ABOUT RECENT PRICE HIKE IN Bangladesh
because recently the price
The recent increase in the price of food, especially rice, has been a cause of concern all over the world and has been critically important issue in Bangladesh; as a net importer of food, the price has closely followed the trend of international markets. The result of this unusually high rate of inflation has had a direct bearing on the poverty status of the country as the incidence of poverty is intimately related to the change in food prices due to the fact that food constitutes a considerable portion of the expenditure of the poor.
Several studies have assessed the impact of food price increase on the level of poverty in Bangladesh. According to the World Bank (2008), a reduction in poverty by 5%, between 2005 and 2008, was expected in Bangladesh resulting from the strong GDP growth during that period. However, the study instead projects around a 3% increase in the incidence of poverty from the baseline rate of 40% in 2005 as a result of the increase in food prices. Therefore, the net impact on poverty, from the combined effects of economic growth and the inflation of food prices, is likely to result in a decline of about 2%; from 40% in 2005 to 38% in 2008. On the other hand, the Centre for Policy Dialogue (CPD) estimates that in fact an additional 8.5% of households have actually fallen below the poverty line because of the high inflation (CPD 2008). Their estimates take the Household Income Expenditure Survey of 2005 as the benchmark, and their projection considers the increase in cumulative Gross National Income (GNI). However, they concluded that the cumulative impact of high inflation (particularly the weighted inflationary impact of the price of rice) has resulted in significant income erosion of the low income groups in Bangladesh.
ABSTRACT
THE MAIN REASONS AND
PUBLIC’S REACTION ABOUT RECENT PRICE
HIKE IN Bangladesh
“THE MAIN REASONS AND PUBLIC‟S REACTION ABOUT RECENT PRICE HIKE IN Bangladesh
because recently the price