Bangladesh Faces Severe Food Inflation, Placed in World Bank's 'Red' Category

The World Bank's latest Food Security Report has placed Bangladesh in the 'red' category for food inflation, indicating a high risk over the past year. Bangladesh joins 14 other countries in this category, reflecting the significant challenges the nation faces in managing rising food prices.

Rising Food Inflation in Bangladesh

According to the report, Bangladesh has experienced over 10 percent food inflation consistently, making daily life increasingly difficult for its citizens. The World Bank publishes this biannual report, which considers food inflation trends over a period of 10 to 12 months. While many global economies, including the United States and the United Kingdom, have managed to mitigate high inflation rates, Bangladesh continues to struggle.

Impact on the Population

The inflationary pressures have hit the Bangladeshi population hard. On average, people spend about half of their income on food, with poorer households spending approximately 70 to 75 percent of their earnings on sustenance. This disproportionate expenditure exacerbates poverty and reduces the ability to spend on other essential needs such as healthcare and education.

Expert Opinions and Economic Leadership

Salim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM), criticized the Bangladeshi government's approach to tackling inflation. Raihan pointed out that temporary measures have been insufficient in addressing the root causes of inflation. He also questioned the accuracy of the inflation figures reported by the Bangladesh Bureau of Statistics (BBS), suggesting that the real rate might be even higher than reported.

Global Context and Comparative Analysis

The World Bank categorizes countries based on their food inflation rates:

• Purple: Over 30%
• Red: 5-30%
• Yellow: 2-5%
• Green: Less than 2%

As of the latest report, 15 countries, including Bangladesh, are in the red category. Other nations in this group include Congo, Gambia, Guinea, Liberia, and Mongolia. Interestingly, some developed nations like Austria, Belgium, and Germany have successfully moved out of the red category through comprehensive economic measures.

Persistent Challenges

Over the past year, Bangladesh's food inflation peaked at 12.54 percent in August, marking the highest rate since the 2023-24 financial year. Average inflation for the same fiscal year was 9.72 percent, the highest in recent memory. Despite these challenges, the national wage growth was only about 7.5 percent, insufficient to keep up with the rising cost of living.

Broader Food Security Issues

The BBS food security assessment survey, published in January, revealed that approximately 22 percent of the population faces moderate to severe food insecurity. Additionally, the average rice stock in households across Bangladesh can last for only 51 days, with significant disparities between rural and urban areas.

Global Comparisons

While Bangladesh struggles, other nations like Malawi, Sierra Leone, Egypt, Myanmar, Argentina, Lebanon, Türkiye, and Venezuela remain in the purple category, reflecting even higher levels of food inflation. Conversely, countries such as Afghanistan, Iraq, Seychelles, Saudi Arabia, and Somalia have managed to maintain low food inflation, placing them in the green category.

For further insights into global food security trends, you can read the World Bank Food Security Report and stay updated with BengaliVogue's latest articles.