{"id":5818,"date":"2026-11-05T05:52:00","date_gmt":"2026-11-05T05:52:00","guid":{"rendered":"https:\/\/spikestory.com\/?p=5818"},"modified":"2026-11-05T05:52:00","modified_gmt":"2026-11-05T05:52:00","slug":"inflation-and-purchasing-power-crisis","status":"publish","type":"post","link":"https:\/\/spikestory.com\/en\/inflation-and-purchasing-power-crisis\/","title":{"rendered":"When Money Loses Its Value, Who Pays the Price? The Real Story of Inflation"},"content":{"rendered":"

Have you ever picked up your grocery bag at the end of the month and felt that the bag is the same size, but there’s less inside?<\/p>\n

Last year, that money bought three kilos of rice and a little fish. This year, it buys two and a half kilos of rice and some lentils. The fish is gone. Nobody told you that you’d become poorer. Your salary hasn’t shrunk. It has even grown a little. Still, you can feel that something is being taken from you, quietly.<\/p>\n

That quiet taking has a name: inflation. Economists call it a “hidden tax.” It doesn’t appear on any receipt, and nobody reaches into your pocket. Yet every month, a part of your purchasing power slips away without a sound.<\/p>\n

First, a Common Misunderstanding<\/strong><\/h2>\n

When inflation falls, we assume prices will fall. They don’t.<\/p>\n

Falling inflation only means prices are rising more slowly. A item that went from 100 to 110 to 118 taka is still 118 taka, even if the rate of increase has slowed. Economist Mustafizur Rahman has made this very point: lower inflation does not mean lower prices.<\/p>\n

So even when the numbers bring “good news,” relief often doesn’t reach people’s pockets.<\/p>\n

What the Numbers Say<\/strong><\/h2>\n

According to the Bangladesh Bureau of Statistics (BBS), point-to-point inflation in May 2026 was 9.42%, up from 9.04% in April. The main driver was food prices.<\/p>\n

In the same month, wage growth was 8.21%. Prices rising at 9.42%, incomes at 8.21%. The gap sounds small. But when the same thing happens month after month, a small gap piles up into a mountain.<\/p>\n

Prothom Alo’s analysis shows that since January 2022, wage growth has not beaten inflation in a single month. Through June, people’s real incomes had fallen for 53 consecutive months. In June, inflation was 9.16% and wages grew 8.18%.<\/p>\n

For four and a half years, people have been earning more taka and buying less with it.<\/p>\n

Who Pays First<\/strong><\/h2>\n

Inflation doesn’t hit everyone equally. The less money you have, the harder it lands.<\/p>\n

The reason is simple. CPD and BBS data show that food makes up 59% of the consumer price index basket. More than 60% of households spend at least half their income on food, and for poorer households the share is even higher.<\/p>\n

A wealthy person gets annoyed when rice gets pricier. A day laborer has to decide what to skip today.<\/p>\n

In a Daily Star report, economist Selim Raihan said that when incomes fall, people cut protein first, then shift to cheaper, lower-quality food. A SANEM study found that poorer households had even reduced their consumption of staples like rice and wheat.<\/p>\n

On paper, these are just percentages. In real life, it’s a child’s plate with no egg on it. It’s a mother’s plate with rice but no curry.<\/p>\n

Then Those Who Saved<\/strong><\/h2>\n

When income isn’t enough, households have three paths: cut spending, drain savings, or borrow.<\/p>\n

CPD’s analysis says exactly this. Under prolonged inflation, households are forced to reduce consumption, exhaust their savings, or take on debt, which raises their risk of falling into poverty. A family that was barely above the poverty line is now at the edge of dropping below it.<\/p>\n

And roughly 86% of the country’s economic activity happens in the informal sector, where there is little room to negotiate wages and no annual increment. When prices rise, these workers have nothing to shield them.<\/p>\n

And Who Gains?<\/strong><\/h2>\n

An uncomfortable question, but one worth asking: does anyone benefit?<\/p>\n

In basic economic logic, people who own assets such as land or property often see those assets rise in value along with prices. Those who borrowed see the real burden of their debt lighten. And those on fixed, low incomes lose the most.<\/p>\n

CPD’s research also points to another part of the story: the food supply chain, with its markets, margins, and intermediaries. How prices swell on the journey from producer to dinner plate is part of the real story of inflation too.<\/p>\n

So What Can Be Done?<\/strong><\/h2>\n

There’s no magic wand. But here is what economists are saying:<\/p>\n

– Targeted support: Expand subsidized food distribution for low-income people so that at least minimum nutrition is protected.<\/p>\n

– Coordinating wages and prices: The government’s own General Economics Division (GED) has warned that wage and price management must be coordinated.<\/p>\n

– Caution on utility costs: When electricity, gas, and transport costs rise, low-income people suffer most.<\/p>\n

– Supply chain transparency: Monitor markets, intermediary margins, and import pressures.<\/p>\n

Analysts also note that if inflation falls to around 7% or below, wages may finally overtake prices again. But that hope will only come true if policy is managed carefully.<\/p>\n

When the taka loses value, nobody receives a receipt for what they paid. No bill arrives. The price is paid in a child’s missing egg, in treatment that gets cut short, in a school education left unfinished, and in sleepless nights of worry. When the news says “inflation rose by 0.38%,” the number sounds tiny. But for someone, that 0.38% is an entire meal.<\/p>\n

So the next time someone calls inflation “just an economic indicator,” remember: behind every indicator are people. And the people with the faintest voices pay first and pay the most. The true measure of an economy’s success isn’t GDP growth. It’s this question: Does the most vulnerable person among us have rice on their plate tonight?<\/p>\n","protected":false},"excerpt":{"rendered":"

Have you ever picked up your grocery bag at the end of the month and felt that the bag is the same size, but there’s less inside? Last year, that money bought three kilos of rice and a little fish. This year, it buys two and a half kilos of rice and some lentils. The […]<\/p>\n","protected":false},"author":2,"featured_media":5816,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[203],"tags":[2821,2822],"class_list":{"0":"post-5818","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-money-management-en","8":"tag-inflation","9":"tag-purchasing-power"},"yoast_head":"\nWhen Money Loses Its Value, Who Pays the Price? The Real Story of Inflation - Spike Story<\/title>\n<meta name=\"description\" content=\"Inflation does more than raise prices; it reduces purchasing power. 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