Bangladesh is going to observe the International Day for Eradication of Poverty today (Saturday) with a worsening poverty situation, as prolonged economic slowdown, persistent inflation and shrinking employment opportunities push more people below the poverty line.
The World Bank (WB) estimates that the country’s national poverty rate rose to 22.5 per cent in fiscal year (FY) 2025-26, up from 18.7 per cent in 2022, reversing part of the progress Bangladesh made in reducing poverty over the past decade.
According to the WB’s October 2026 Bangladesh Development Update report, around 2.1 million additional people fell below the international poverty line during last FY2026.
The report also warns that nearly 62 million Bangladeshis remain vulnerable to falling into poverty following an economic or personal shock.
The findings came ahead of October 17 (today) observed globally as the International Day for the Eradication of Poverty, highlighting the growing challenge facing policymakers as the country struggles to restore economic growth, protect household purchasing power and generate adequate employment.
The United Nations designated the day in 1992, though the date traces back to 1987, when over 100,000 people gathered in Paris at the Trocadéro to honour victims of extreme poverty. The latest estimates indicate that Bangladesh’s poverty has increased for a fourth consecutive year, reflecting the combined effects of elevated living costs, weak labour demand and sluggish economic activity.
The WB’s estimate of 22.5 per cent is based on its modelling and should not be confused with a new official household poverty survey.
The Bangladesh Bureau of Statistics (BBS), in its Household Income and Expenditure Survey (HIES) 2022, put the national poverty rate at 18.7 per cent and extreme poverty rate at 5.6 per cent.
The BBS survey had recorded a significant decline in poverty from 24.3 per cent in 2016 and 31.5 per cent in 2010, demonstrating the progress made before the recent economic difficulties.
However, the World Bank’s latest assessment suggests that the gains have come under increasing pressure.
According to the WB, persistent inflation has emerged as a major threat to poverty reduction, particularly for low-income households that spend a large share of their earnings on food, housing, transport and other essential items.
Although average inflation eased to 8.7 per cent in FY2026 from around 10 per cent in FY2025, prices remained high, continuing to erode the purchasing power of households whose incomes have failed to keep pace, the Bank said.
Employment fell by nearly two million between 2023 and 2024, while a further decline of around 0.8 million was expected in 2025, according to the bank’s labour-market assessment, the WB said.
Industrial activity has also suffered from shortages of gas and electricity, forcing some businesses to cut production, reduces working hours or lay off workers. The resulting loss of earnings has left many households more exposed to rising living costs.
Bangladesh’s economic growth slowed to 3.4 per cent in FY2026, according to the World Bank’s October update, down from 3.5 per cent in FY2025 and 4.2 per cent in FY2024.
The slowdown has weakened the economy’s capacity to generate the jobs and income growth needed to reduce poverty.
Bangladesh has made substantial progress in reducing poverty between 2010 and 2022. The World Bank’s 2025 Poverty and Equity Assessment said the national poverty rate fell from 37.1 per cent in 2010 to 18.7 per cent in 2022, lifting approximately 34 million people out of poverty.
Extreme poverty declined from 12.2 per cent to 5.6 per cent over the same period.
But the assessment also found that the pace of poverty reduction slowed after 2016 and economic growth became less inclusive, with income gains increasingly favouring better-off households.
The bank estimated that around 62 million people-roughly one-third of the population-were vulnerable to falling back into poverty because of illness, natural disasters, job losses or other unexpected shocks.
The latest deterioration reinforces concerns that progress in poverty reduction remains vulnerable when growth fails to translate into secure employment and sustained improvements in real incomes.
Expressing concern over the effectiveness of government social protection programmes, the WB said Bangladesh operates numerous social assistance schemes, subsidies and cash-transfer programmes, but weaknesses in targeting mean that support does not always reach the households most in need.
The bank’s latest assessment says the country’s social protection system remains fragmented, with overlapping programmes and inadequate benefits limiting its ability to protect vulnerable people.
Evidence from 2022 showed that half of the poorest households did not receive any social assistance benefits, while 35 per cent of the richest households received such support.
The World Bank has urged the government to improve the targeting of cash transfers, consolidate fragmented programmes and strengthen assistance for poor and vulnerable households.
The World Bank has identified productive employment as central to restoring Bangladesh’s poverty-reduction momentum.
Its poverty assessment calls for more and better-paid jobs, particularly for young people, women and vulnerable workers, alongside stronger agricultural value chains, improved connectivity and a more supportive business environment.
The challenge is significant for a country where millions of young people enter the labour market and where industrial expansion, private investment and employment generation have weakened.
Economists and development experts have long argued that sustained poverty reduction requires more than economic growth alone.
Source: https://thefinancialexpress.com.bd/economy/21m-more-fell-below-poverty-line-in-fy26
