The standard of living refers to the level of resources, comfort, material goods and necessities available in a particular socio-economic class or geographical area. The standard of living is basically based on two factors: income and expenditure.
“Some people mistakenly use the Standard of living & cost of living with the same meaning. They are, in fact, completely different.”
The cost of living reflects how much money individuals require to live. Specifically, how much they need to buy their groceries, clothing, gasoline, cars or pay for public transport (or both), pay their utilities, cover healthcare costs, school/university fees, housing, and other basic survival items.
Sometimes this measure also includes luxuries such as going out of town or abroad on vacation, eating out, entertainment, Christmas/birthday presents, etc.
Inflation is the rate at which the value of a currency is declining and, as a result, the general level of prices of goods and services is rising in an economy. The imbalance between supply and demand is the cause of inflation. Inflation occurs when daily expenditure increases. Prices rise as more and more people compete to buy a limited number of products. Inflation affects one’s quality of life because it can reduce one’s ability to spend. Inflation can be the opposite of deflation, which occurs when the purchasing power of money increases and the price decreases.
Annual inflation in Bangladesh rose for the fifth consecutive month to 6.05 per cent in December 2021 from 5.98 per cent in the previous month. This was the highest inflation rate since October 2020, as prices of both food (5.46 percent vs. 5.43 percent in November) and non-food (7 percent vs. 6.87 percent) items rose sharply. On a monthly basis, consumer prices fell 0.38 percent from 0.49 percent in the previous month.
Food consumption in Bangladesh increased by 5.46 percent in December 2021 compared to the same month last year (Source: Bangladesh Bureau of Statistics). According to the Trading Economics Global Macro model and analysts’ expectations, food inflation in Bangladesh is expected to reach 5.70 percent by the end of this quarter. In the long run, according to our economic model, food inflation in Bangladesh is projected to be around 5.00 percent in 2023.
The capital city of Dhaka is home to almost 9 million people. More than 2 million of these individuals either live in slums or are without any proper shelter. So to handle this sharply growing inflation rate the living standard of our urban area has declined continuously.
- Israt Moriom Khan, Senior Lecturer at the Department of Business Administration, Daffodil Institute of IT (DIIT)
