The economy of Eid-ul-Fitr in Bangladesh

The festival of Eid-ul-Fitr is the biggest religious festival of Muslim communities worldwide. Muslims make up 91.04% of Bangladesh's population, making the country the fourth-largest Muslim population in the world. The celebration of Eid-ul-Fitr and all the activities during Ramadan have a phenomenal impact on the country’s socio-economic conditions. Eid-ul-Fitr is a crucial fiesta celebrated by all Bangladeshis, regardless of their religious belief. Although rooted in religion, this festival's widespread acceptance across the country significantly impacts the economy.

Over time, Eid-ul-Fitr has spontaneously gained widespread interest among everyone in the country. During the late 1980s, Eid festivals were celebrated, with singing and music being the main activities. Many other socio-economic activities have been added to the celebrations, made more formal and diversified. Eid celebrations have evolved into occasions for exchanging pleasantries among friends and relatives and events for economic growth, cultural activities, and political maneuvering. 

Eid is now properly celebrated in Bangladesh with great enthusiasm. On the eve of Eid, known as Chandrat, Muslims often visit bazaars and shopping malls with their families. Women, especially young girls, usually decorate their limbs with henna. The traditional Eid greeting is “Eid Mubarak,” often followed by a formal embrace. Gifting new clothes as part of the tradition is common, and children often receive small sums of money from their elders.

During the Eid-ul-Fitr festivities, an observable phenomenon known as the Eid-ul-Fitr effect impacts the socio-economic sphere. Increased sales in various types of shops, such as clothing, footwear, cosmetics, jewelry, and electronic gadgets, characterize this effect. These shops experience a significant bulge in their sales during this period.

Despite the significant amount of money spent by the nation on Eid-ul-Fitr, including the months' salary and festival bonuses, and the influx of remittances, there is a noticeable increase in business activity in the transportation sector. This occurs due to the large number of people traveling during the festivities. Media reports confirm substantial financial transactions during the celebration of Eid in a country with a population of 175 million people.

Commercial banks usually witness a rush of monetary transactions during the days leading up to Eid-ul-Fitr. Many customers withdraw and deposit money into their accounts. This rush of transactions leads to a liquidity shortage for commercial banks, which ultimately causes borrowing money from the financial markets to deal with the problem. According to the statistics from Bangladesh Bank, during this season, Bangladesh's banks and non-bank financial institutions borrowed a record amount of money from the call money market accounting for over one lakh crore taka last year. The surge in customer liquidity demand has resulted in an overwhelming influx of transactions, prompting Bangladesh Bank to inject large sums of money into the banking system. This is due to the massive influx of customers into almost every bank branch nationwide before the Eid holidays began.

Muslim businesses spend heavily during Eid, positively impacting the stock market. Also, there is a flood of remittances during this period. The transportation sector is also experiencing increased business activity due to the many travelers. This enormous magnitude of money transactions boosts the economy of 175 million people with $2457 per capita GDP of Bangladesh.

Eid-ul-Fitr is also known as the celebration of the distribution of Fitra, a form of charity from the rich to the poor. This allows people experiencing poverty to celebrate Eid by providing much-needed resources. Wealthy Muslims distribute Zakat during Eid al-Fitr in addition to Fitrah. Zakat is the 2.5% obligatory share of their wealth given to the underprivileged as decreed by Allah. This practice is an essential aspect of the festival and is seen as helping those in need and fulfilling religious obligations.

In Bangladesh, Eid is celebrated adequately with great enthusiasm. Festivals have evolved from simple food prayers in primitive societies to more diverse and lively occasions. The eve of Eid is known as Chandrat, which means the sighting of the moon. Muslims usually visit bazaars and shopping malls with their families for the add-ons of Eid shopping.

Most Muslims spend large sums of money on Eid, boosting domestic and rural economies. This is due to increased business activity and demand for goods and services during the holiday season. Increased spending has created a ripple effect, positively impacting various sectors of the economy, such as retail, transportation, and hospitality. 

Currently, Bangladesh’s economy is facing several junctures. Bangladesh's external debt is rising, reaching nearly $100 billion in April. The trend raises concerns about the country's ability to manage its debt burden, given the repayment obligations of 20 megaprojects it owes foreign creditors between 2024 and 2026. If these loans are not repaid on time, the situation could significantly shock the economy. In such a period, this Ramadan, followed by the Eid fiesta, can bring a new beacon of hope for fellow citizens.

Increased spending during festivals like Eid provides new impetus to producing goods, employment, and income, contributing to economic revitalization and social renewal. This increase in economic activity has synergistic effects, creating new employment opportunities, raising income levels, and creating a virtuous cycle of growth and development. Festivals like Eid are essential in promoting economic growth and social welfare.

The writer is a Researcher atN ova Information Management SchoolL, isbon, Portugal

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