Inflation cuts deep into consumer spending: DCCI’s economic index

High inflation is cutting deep into consumer spending, leaving Bangladesh's service-sector businesses struggling with falling sales and rising costs, according to an economic index released by the Dhaka Chamber of Commerce and Industry (DCCI).

The country's inflation rose to 9.04% in April from 8.71% in March, according to the Bangladesh Bureau of Statistics (BBS).

The chamber's Economic Position Index (EPI) found that consumers have sharply reduced spending as the cost of living continues to rise, putting pressure on retailers, transport operators and other service providers.

Businesses surveyed for the report said weak demand has become one of their biggest concerns.

"Inflation has cornered consumers and weakened purchasing power," said AKM Asaduzzaman Patwary, acting secretary general of the DCCI, while presenting the report at a seminar organised by the chamber today.

According to the report, higher rents, utility bills and fuel prices are eating away at already thin profit margins.

Small and medium-sized enterprises are feeling the pressure most as they struggle to manage higher operating expenses without losing customers.

Businesses also cited difficulties in obtaining bank loans, while delays in licensing and other regulatory procedures are adding to costs.

The report identified a shortage of skilled workers, particularly in technical and customer service roles, as another challenge for the sector.

The DCCI introduced the quarterly index to track changes in business conditions more closely than traditional economic indicators.

Patwary said official data often fails to capture the real situation businesses face because it is published long after conditions have changed.

“There is no proper metric that can effectively reflect the periodic health of the private sector,” he said.