• Wednesday, Aug 17, 2022
  • Last Update : 03:54 pm

Cost of living in Dhaka goes up 6.88% in 2020

  • Published at 08:06 pm June 16th, 2021
Cost of living info

Inflation continue to make things worse

The Covid-19 outbreak in March last year forced expenses to shoot up in the capital, like every other country, resulting in the cost of living going up by 6.88%, the highest in the last three years.

This increase was 6.50% and 6.08% respectively in 2019, and 6.0% and 5.19% respectively in 2018.

Consumers Association of Bangladesh (CAB) said this citing a report at a press briefing on Wednesday. 

The report also said that inflation went up by 6.31%.

CAB collected data from the capital’s retail markets and relevant services in 2020 on 114 food items, 22 daily-consumed goods, 15 retail markets, and consumer-based services.

The cost of living has been calculated based on the value of a product or service and the total cost of the product or service that resides under the consumer's segment- excluding healthcare, education, and travel expenses.

CAB findings

By the end of 2020, the average cost of rice increased by about 20%, compared to 2019.

Prices of domestic and imported pulses have increased by an average of 14.18%.

Prices of local pulses increased by 28.89%, while the imported varieties 48.45%. 

Edible oil prices also rose by an average of 8.97%. Of this, loose palm oil rose by 17.17% and loose soybean by 14.25%. 

The cost of sugar and molasses increased by about 25% per kg.

The prices of various spices increased by an average of 24.66%. 

Of these, cardamom increased by 104.18%, domestic dried chillies by 40.66 %, green chillies 31.96%, imported ginger 31.04%, local onions 18.27%, imported onions 16.83 %, and imported dried chillies by 30.49%.


Also Read - Dhaka one of the most expensive cities in the world


The prices of vegetables have gone up by an average of 9.88%. 

The highest increase was 34.30% in bitter gourds, 31.16% in raw papaya, 25.55% in local potatoes, and 24.86% in imported potatoes.

Compared to 2019, the price of beef and mutton has increased by an average of 10.49%, the cost of chicken by 10.83%, and the price of eggs by 5.32%. 

The prices of fishes increased by an average of 7.13% in 2020. 

On average, the cost of powdered milk has risen by 7.64%.

For utilities, the cost of water increased by 25% per thousand litres. In addition, the average cost of electricity for residential has risen by 6.05%, and the average price of commercial electricity has increased by 4.81%.

The average middle-class house rent has risen by an average of 5.35%, with the highest increase being in flat houses by 7.85%, slum rent in slums by 3.45%, and 6-seater rooms in messes also by 3.45%.

Salehuddin Ahmed, a former governor of Bangladesh Bank, speaking to Dhaka Tribune, said: “The number of poor people in the country has increased by a significant amount. But in regards to inflation, the supply chain factor has a more significant impact on the prices. Demand did not increase with purchasing power declining because of multifaceted issues that are not limited to the pandemic.”

Traders and wholesalers of the country heavily fluctuate the price of goods, primarily increasing it to profit during any crisis, global or not, he added. 

According to a survey by the Bangladesh Bureau of Statistics, the family-based monthly income came down by about Tk4,000 to Tk15,000 due to the pandemic. 

Meanwhile, 37% or 7.4 million people working in the SME industry, lost their jobs in 2020. 

According to an International Finance Corporation (IFC) survey, employment in other sectors also declined with businesses shutting down and private companies resorting to layoffs and salary reductions. 

According to the Planning Commission, 29% of the population has now become poor.

However, Shakila Yasmin, a resident of Uttara and a landlord, contested the price of rent shooting up in the metropolitan, alongside a few others.

 “With the advent of the pandemic, we had decreased rent by Tk1,000 at least. However, utility prices apart from electricity neither increased nor decreased,” she added.

CAB Vice-President SM Nazer Hossain said: “Rent increased in early January 2020, as Bangladesh identified the first Covid-19 patient in March and went into shutdown the same month. However, rent did not go down following several months as we gradually began to understand the impact of the pandemic.”

Neo-poor feels left out of national budget

In the proposed budget for the fiscal year 2021-22, the middle class and the new-poor- induced by the adverse effects of the pandemic- fear that it will not benefit them.

Talking to another Dhaka Tribune correspondent, they said their worst fears had manifested in the form of the proposed budget as prices of essential commodities sky-rocketed before Ramadan and remained out of their reach.

Sanjid Khatun, a housewife from Azimpur, said the middle class remained out of any direct assistance from the government, as seen in the budget.

"We would have been delighted if they considered lowering the cost of essential goods. Since Ramadan, grocery prices skyrocketed, with no respite in sight," she also said.

She also lamented that apart from commodity price hikes, bills for mobile and internet keep increasing but their income did not soar as much.

Prof Nazrul Islam, a former faculty of economics at the University of Dhaka (DU), said that it would not be right to think that the country will move forward by neglecting the middle-class population. 

The proposed budget will be passed on June 30.  Various suggestions are coming from economists and concerned people, and these should be considered, he also said.

There is room for further discussion and modification at this time, as there is no effective program in the budget for job creation or employment-oriented or those who have become new poor due to the pandemic. It is vital to include incentives and facilities in the revised budget for the middle class and the new poor, Prof Nazrul added.