A FURTHER widening in income and consumption inequalities that the findings of the Household Income and Expenditure Survey 2022 report appears alarming. The findings that national statistical office made public on April 12 shows that income inequality measured 0.499 in Gini coefficient, a measure of the distribution of income across the population in 2022, on a scale of 0–1. The figure, which is now short of 0.017 marks from the level of 0.50, said to pose a high risk of social unrest, had been calculated static at 0.482 since 2016. It was 0.458 in 2010. A smaller Gini coefficient means a less unequal distribution of national wealth. Income inequality, as the survey report says, has increased to 0.539 in urban areas in 2022 from 0.490 in 2016 but it decreased to 0.446 in rural areas in 2022 from 0.454 in 2016. While economists suggest that policies should be worked out to immediately check widening income inequality, they find the decline in inequality in rural areas as the rate of poverty in rural areas is high. Although overall poverty nationally declined to 18.7 per cent in 2022 from 24.3 per cent in 2016, it declined to 20.5 per cent in 2022 in rural areas, from 24.4 per cent in 2016, against a decline to 14.7 per cent in 2022 in urban areas from 18.0 per cent in 2016.
All this having happened, as the survey shows, consumption inequality has also widened as it increased to 0.334 in 2022 from 0.324 in 2016, which was 0.321 in 2010. In such a situation, people are reported to have been withdrawing their bank savings to cope with the increased living cost said mostly to have been caused by growing inflation. The overall inflation reached 9.52 per cent in August 2022, which was the highest in a decade. The rate gradually came down to 8.57 per cent this January, but it started increasing in February to reach 8.78 per cent, which in March increased to 9.33 per cent. Bangladesh Bank data show that savings deposit declined by 4.16 per cent to Tk 3,539.11 billion while fixed deposit declined by 0.16 per cent to Tk 6914.31 billion in December 2022 in three months since September that year. Experts believe that people are using up their savings to maintain their consumption amidst the shock of growing inflation as the earning of people is not going up. A situation in which banks do not offer high interest rate, which could have supported the people in need in this precarious financial situation, is believed to have prompted people to withdraw their savings. Official data also show that the amount of consumer loans surged by 14.55 per cent to Tk 1288.79 billion in December 2022 from Tk 1125.18 billion in September that year. The proposition suggests failures of the government in arresting inflation and in taking measures to cushion off people from the impact of inflation. All this, as earlier media reports say, have forced people, especially the poor and people of the low- and fixed-income groups to cut down on their food consumption and reduce medical and educational expenses.
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