Bangladesh’s poverty rate is expected to rise to 21.2 percent this year, up 0.7 percentage points from 2024, reaching the highest level since the post-COVID period, or the past four years. The projection was made by the World Bank in its “Bangladesh Development Update” report. The report highlights the country’s weak labor market performance, noting that labor force participation fell from 60.9 percent in 2023 to 58.9 percent in 2024. Around 3 million people have lost their jobs, with roughly 2.4 million women among them. As a result, the employment-to-working-age population ratio declined by 2.1 percentage points to 56.7 percent.
According to World Bank data, the poverty rate in 2024 was 20.5 percent; in 2023, it was 19.2 percent; and in 2022, 18.7 percent. However, the report adds that if planned economic reforms are effectively implemented — including restructuring the banking sector, expanding investment and trade, controlling inflation, sustaining remittance flows, and ensuring policy transparency — the economy will stabilize in 2026 and 2027, and poverty will decline significantly.
Earlier, local research organization Power and Participation Research Centre (PPRC) and the Bangladesh Bureau of Statistics (BBS) had also reported an increase in poverty. According to BBS data released in January 2025, the poverty rate stood at 19.2 percent. And based on the 2022 Household Income and Expenditure Survey, the rate was 18.7 percent. PPRC’s survey, however, found that poverty rose to 27.93 percent in 2025, up from 18.7 percent in 2022. The same study showed that extreme poverty increased from 5.6 percent in 2022 to 9.35 percent in 2025.
Regarding the poverty rate rising, Finance Adviser Salehuddin Ahmed said at the Secretariat on Tuesday (October 7), “They interviewed five thousand people over the phone and concluded that poverty has increased. I know these things. I won’t go into theoretical discussions now. If I have to talk about whether poverty has increased or still exists, I’ll have to give a long explanation. I know how they measure poverty.”
Referring to a remark by economist Amartya Sen, the adviser added, “He once said, you don’t need a very complex measure to identify extreme poverty. You can recognize a poor person just by looking at their face and behavior.”
The World Bank has attributed the rise in poverty and the employment crisis in Bangladesh to high inflation and declining wages, which have put additional pressure on households. Persistently high inflation has eroded the purchasing power of families, with the impact being most severe on low-wage earners whose real wages fell by 2 percent in the 2025 fiscal year. The Bank projected that the poverty rate could decline to 19.1 percent in 2026 and further to 18.1 percent in 2027.
The report noted that Bangladesh’s economy will gradually move toward recovery over the next few years if necessary policy measures and reform initiatives are implemented effectively. Growth is expected to accelerate significantly in 2027. It added that as inflation gradually comes under control and remittance inflows increase, private consumption will expand further, strengthening the overall economic activity.
However, the World Bank also warned that the recovery process will be extremely fragile. Its success will depend on three key factors: first, how effectively planned reforms are implemented; second, how quickly the banking sector can be restructured and stabilized; and third, how conducive the domestic and external economic environments remain.
The World Bank also projected that the country’s GDP growth will stand at 4.8 percent this year. The multilateral lender and development partner believes that this GDP growth, along with increased private investment and economic stability, could help reduce poverty.
Experts have said that the increase in Bangladesh’s poverty rate is logical. They noted that the country’s economic growth and employment have not kept pace with population growth. They said that no new investment has come in over the past year, and without investment, no country can create employment opportunities. Meanwhile, inflation continues to rise, driving up the prices of essential goods and eroding people’s purchasing power.
Dr. Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), told Bonik Barta, “Since investment has slowed, employment opportunities have declined, and high inflation has persisted for a long time, resulting in people’s purchasing power falling and poverty rising. The World Bank has projected that poverty will decline and growth will return in the future. But if we consider the factors, it’s clear that the economic burden on people has grown. The living standards of low-income groups are deteriorating further, especially among the poor. It’s important to remember that without investment, employment cannot be generated, and business expansion will stall. Many businesses are already shrinking, meaning they no longer need as many workers. If businesses expand, new jobs are created, growth accelerates, and poverty declines.”
Speaking at a seminar organized by the Policy Research Institute (PRI) on October 7 evening on the World Bank’s latest report, the institute’s Vice Chairman, Dr. Sadiq Ahmed, said, “The number of unemployed and underemployed educated youth in the country is rising alarmingly. Given the financial constraints in the current reform agenda, Bangladesh must carefully prioritize growth and employment generation.”
Dr. Franziska Ohnsorge, Chief Economist for South Asia at the World Bank, said that expanding open trade and adopting artificial intelligence (AI) could be transformative for South Asia. In Bangladesh, she said, effective policy reforms that facilitate the reallocation of workers across sectors and locations would help channel resources into productive industries, boost investment, and create jobs.