Bangladesh's middle-class households are facing a deepening cost-of-living crisis, as persistently high inflation, surging energy tariffs, and stagnant real wages steadily erode purchasing power and household savings, according to a report by The Daily Star. For families that once managed routine expenses while setting aside modest savings each month, that financial buffer is rapidly disappearing.

The Strain on Household Budgets

The squeeze is forcing many families to cut discretionary spending, delay healthcare and education outlays, trade down to cheaper goods, or take on debt simply to sustain basic living standards. The pattern reflects a broader structural shift: households that once sat comfortably above subsistence are now navigating month-to-month financial stress.

The experience of Rezwana Rahman, a resident of Dhaka's Mohammadpur area, illustrates the pressure. After a relatively cooler July — during which her family used their lone air conditioner sparingly — she expected the electricity bill for her two-bedroom flat to stay below Tk 2,000. Instead, the bill came in above Tk 3,000.

Notably, the spike occurred despite lower actual consumption compared with May, when a fortnight-long gas outage had compelled the family to run both an air conditioner and an induction stove simultaneously — and yet that month's bill had been around Tk 2,000. The contradiction left Rahman struggling to understand how her household budget could absorb further increases in essential costs.

Energy Price Hikes Add to the Burden

The electricity bill anomaly is not an isolated incident. Following the Iran war that began in February, the government raised prices of fuel, power, and liquefied petroleum gas (LPG), compounding pressure on households already contending with elevated food and transport costs.

The Centre for Policy Dialogue (CPD) had flagged the risk as early as June, warning that higher power tariffs risked worsening Bangladesh's already severe inflationary environment. Those warnings have since been borne out by official data.

Inflation Data Confirms the Pressure

In its quarterly Inflation Dynamics in Bangladesh report for the fourth quarter of fiscal year 2025-26, Bangladesh Bank identified energy inflation as the primary driver of average headline inflation, which rose to 9.21 per cent. The central bank's findings validate what middle-class households have been experiencing on the ground.

Food prices have compounded the crisis. Food inflation accelerated to 8.7 per cent in June, up from 7.71 per cent in December last year and 8.24 per cent in March. The rise was driven by sharp increases in prices of meat, fish, fruits, vegetables, and spices, according to the report.

Who Is Most Affected

The middle class — broadly defined as salaried urban households that depend on fixed incomes — bears a disproportionate share of this burden. Unlike the very poor, they typically do not qualify for government subsidy programmes; unlike the affluent, they lack the financial reserves to absorb sustained price shocks. This structural vulnerability means that prolonged inflation effectively hollows out the middle-income segment over time.

With energy tariffs unlikely to reverse in the near term and food price pressures persisting into the current quarter, Bangladesh's middle-class households face continued financial strain through the remainder of 2025-26.