Like every other country in the world, Eid-ul-fitr is the biggest festival for Muslims in Bangladesh. The holiday is celebrated with friends and family by indulging in food, buying new things and visiting new places. While the holiday holds religious and spiritual significance, its effects on the economy are also noteworthy. The expenditure on commodities by each and every individual and household cumulatively crosses millions of taka.
Eid is a huge income generating event for virtually every sector and every industry. Restaurants, shops, resorts and hotels all earn millions on the occasion of the festival. Travelling abroad during the holidays has also become popular and the local airlines companies greatly profit off of this trend.
The overall economy of the country gets a pronounced boost as consumption of all sorts of goods and services increases during this period. Internal tourism sector is particularly benefitted during Eid holidays as many venture to different parts of the country to relax and unwind. Hotels, motels and resorts in places like Cox’s Bazaar, Chittagong and Sylhet operate at maximum capacity. Restaurants and shops located near these holiday spots also cash in on the festivities.
The transport sector also sees a sharp increase in activity as many travel to their village homes by buses, trains, planes and launches. People also travel to popular tourist destinations and places of scenic natural beauty. Gone are the days of simplicity and quaint celebrations. While home cooked food is still a part of the festivities, no Eid is complete without going out to eat with friends and family. While the demand for restaurants and cafes is already high, the occasion of Eid and the ending of the month of Ramadan draws in more customers for them than the rest of the year combined.
Shopping for new clothes, shoes, as well as household appliances, jewelry, cars is part of the festivities of Eid. Sales of electronic devices also increase, along with other luxury goods. People from all walks of life engage in gift-giving. The increase is sales of high-end goods is the most prominent during this time of the year.
All companies and organizations take part in Eid campaigns and provide lucrative offers and big discounts to further boost their sales. The service sector also benefits during this time of the year, with beauty parlors and salons for both men and women making big bucks on the eve of the holiday.
Demand for agricultural goods, meat and a dairy product, as well as processed foods also goes through the roof. After a month of fasting and abstention, people spend the three days of Eid preparing and eating delicious, traditional food. The increased spending during the month of Ramadan and on Eid puts an immense stress upon the financial institutions. Banks face a huge rush of liquidation during this time which leads to them borrowing from the call money market.
However, the record number of transactions processed in the call money market by banks and financial institutions eventually leads to interest rates increasing significantly. In the past, Bangladesh Bank has had to pump in record amounts of money into the banking system to prevent such short term instabilities.
The effects of Eid expenditure can be seen in the stock market as well. Stock prices tend to go up slightly during this period due to an increase in confidence of investors. There is also an increase in remittance being sent in to support family spending during Eid. Another area where there is a notable increase during period is the import business. To meet increased consumer demands many kinds of food and other products are imported in before Eid.
However, this short term rise in demand for goods can have unexpected consequences at times. Sometimes inflation follows this sharp and short lived increase in demand causing damage to the economy. In a country like ours, the wealth disparity becomes apparent during this time as one faction of society indulges in excesses while the other half struggles to make ends meet. Perhaps someday, Eid will be a festival for all, and all will be able to afford to celebrate Eid.
Synthia Kainath Nur is member
of the Editorial Team of
Bangladesh Post
