ASSIGNMENT
Impact of Inflation and COVID-19 on Income, Consumption and Savings of a
Rickshaw Puller
Student’s Name: Amirus Salehin Ha-meem
Student ID: SS-135-077
Course No: ECON 102
Course Instructor: Md. Saiful Islam,
Lecturer, Dept. of Economics, Dhaka University
Abstract
Purpose: From the start of 2020, the whole world has been facing the crisis of a pandemic unseen in the
last 100 years. Many countries around the world have suffered heavily. We’ve been seeing the impact of
inflation and COVID-19 in our daily lives. But what about the lower income people of our society? How
have they managed to survive through such hardships and economic downturns? This survey is a small
endeavor toward answering that question.
Survey Region: This survey was done near the Mol Chottor of Dhaka University on 22 September during
noon.
Findings: Daily income has decreased by 41.66% on average and consumption expenditure has risen by
16.6%
Short Introduction of Interviewee
Muslim, a 26-year-old rickshaw puller hailing from Dinajpur, now lives at Kamrangirchar away from
family; has been working as a rickshaw puller for 12 years. At first, he used to pull a rickshaw around
Mirpur but for the last 6 months, he is working around the Dhaka University area. Every weekday, he
tries to go to Dinajpur to meet with his family.
His previous profession was farming but he was forced to migrate to Dhaka. At his hometown, he has
some farmlands which still contribute to his income. His family consists of 5 members: his father, mother,
wife, and an 8-year-old daughter (who studies at a local school), all of whom reside in their hometown at
Dinajpur. From the short conversation we had, he told me that he was the only earning member of the
family.
He tries to save some money at the end of the month but it is getting harder to put money aside for
savings. He has a DPS account at Asha Bank. He has also taken some loans from Grameen Bank to buy
livestock; which he is repaying in installments.
Chart of Mr. Muslim’s monthly expenditure and income (in taka)
Daily Income
Before COVID19
After COVID19(At Present)
Daily
Expenditure
Monthly Income
Monthly Savings
700-1200
Daily
Renting Fee
(for
rickshaw)
300
500
Around 16000
500
700-800
300
600
Around 12000
500
Impact of COVID-19
COVID-19 has left a profound impact on lower income households. Most of the households had to micro
manage their consumptions or had to lower their consumption drastically. This led to malnutrition, which
worsened their health. COVID-19 has left these families more vulnerable than ever. Such economic
shocks have driven many families below the poverty line, who were once improving their condition. Mr.
Muslim’s family has to struggle every day to make both ends meet. COVID-19 has also reduced his
income and so, he has to decide very carefully how to allocate his income among consumption, savings,
medical fees and other expenses.
Not only the impact of COVID-19 is multifaceted but it is also long lasting.
Impact of Inflation
Multiple variables have been contributing to the inflation level of our country and worldwide. Supply
disruptions due to Russian invasion to Ukarine, soaring high prices of oil, gas and commodities all
contribute to high inflation rate. People with limited budget either have to get crafty about their
expenditures or decrease their consumptions. The same scenario applies for Mr. Muslim’s household. He
can only afford a limited choice of foods for the whole family. The depreciation of taka also adds to high
inflation rate.
But a question may arise, why are the lower income class so badly affected by the inflation? As we can
see from the chart, Mr. Muslim, a representative of the rickshaw puller’s community; a big portion of his
earnings is spent on essential basic needs (i.e. food and education). Hence, if the inflation raises the price
of necessary commodities, Mr. Muslim is unable to pay for them and his family is severely affected by it.
Conclusion
Resilience, is a key factor to the survival of lower income families. Time and time again, they have shown
adaptability to adverse situations. Mr. Muslim’s case is a prompt example of such resilience. He has
shifted from farming to rickshaw pulling, he has maintained a steady consumption level and he is also
thinking of the future by saving some of his earnings. However, his patience is tested every time when the
price of commodities rises in the market. It is only a matter of time when the brunt of inflation is too
heavy to carry for them. We can conclude that both the pandemic and high inflation rate has decreased
Mr. Muslim’s income, consumption and aggravated his monthly expenses. Although, the scars of
COVID-19 may take time to heal, lower income families like Mr. Muslim’s, need government subsidies
and support from other organizations to survive in this economy.