Price Hike in Bangladesh
Introduction:
Causes of Price Hike in Bangladesh:
"The prices of essentials have marked a rise not only in Bangladesh but also elsewhere in the world due to the Covid-induced recession in the global economy."
— Prime Minister Sheikh Hasina
However, price hikes in Bangladesh can be caused by various factors such as inflation, currency devaluation, increase in demand, decrease in supply, natural disasters, political instability, and global economic factors.
One of the major causes is the increase in the cost of production. The rise in the price of raw materials, labor, and energy has a direct impact on the cost of production, which in turn affects the prices of goods and services. The increase in the cost of production is often due to the depreciation of the local currency, which makes imports more expensive.When the cost of production and transportation of goods increases, the sellers may increase the price of their products to maintain their profit margins.
Another factor contributing to the price hike is the shortage of supply. In Bangladesh, the supply chain is often disrupted due to natural disasters, political instability, and transportation problems. As a result, the prices of goods and services increase due to the shortage of supply.
Furthermore, the increase in taxes and tariffs also leads to an increase in prices. The government often imposes taxes and tariffs on imported goods to protect local industries. However, this often leads to an increase in prices, as businesses pass on the extra cost to consumers.
Impacts of Price Hike in Bangladesh:
The impacts of price hike are far-reaching and affect all segments of society. One of the most significant impacts is the increase in the cost of living. As prices of essential goods and services such as food, housing, and healthcare increase, it becomes increasingly difficult for people to afford basic necessities.
Md Khokon is a pedlar who sells tea and biscuit on the streets of Dhaka. People like Khokon are among those who are most severely affected by the price hike. Yet, they remain indifferent to this radical change. It's not like I can do much about it," he said plainly. "Whom am I going to protest to? Who is going to listen to my words? Nobody cares about what happens to us." Khokon also added, "The high price is already bad enough, if I stop my business for one day we are surely going to suffer. If I go to protest then who is going to earn my livelihood and who is going to feed my family?"
Moreover, price hike has a negative impact on businesses. As the cost of production increases, businesses are forced to increase the prices of their products, which in turn reduces demand. This can lead to a decrease in profits and, in some cases, bankruptcy.
Price hike also has a direct impact on the economy. When the prices of goods and services increase, inflation increases, and the value of the local currency decreases. This can lead to a decrease in foreign investment and an increase in the cost of borrowing for businesses and individuals.
Conclusion:
In conclusion, price hike is a major challenge facing Bangladesh .The causes of price hike are many, including the increase in the cost of production, the shortage of supply, and the increase in taxes and tariffs. The impacts of price hike are also far-reaching, affecting individuals, businesses, and the economy as a whole. To mitigate the effects of price hikes, the government can take measures such as controlling inflation, regulating the market, providing subsidies, and implementing policies to encourage domestic production. Consumers can also take measures such as budgeting, comparing prices, and making informed purchases to reduce the impact of price hikes on their finances. To address this issue, the government needs to take appropriate measures to stabilize prices and improve the supply chain.
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