Bangladesh faces a worsening poverty crisis as the World Bank reports a rise in the national poverty rate to 22.5 per cent in fiscal year 2025-26, up from 18.7 per cent in 2022, reversing nearly a decade of progress.
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.
Economic Pressures Drive Poverty Increase
The World Bank’s October 2026 Bangladesh Development Update report estimates 2.1 million additional people fell below the international poverty line during the latest fiscal year. Nearly 62 million remain vulnerable to poverty due to economic shocks or personal setbacks, according to the analysis. This figure represents roughly one-third of Bangladesh’s population and shows how sudden disruptions like illness, natural disasters, job losses or other unexpected shocks can rapidly push households back into poverty.
Several factors are driving this decline. Economic expansion slowed to 3.4 per cent in FY2026, down from 4.2 per cent in FY2024. Despite inflation easing to 8.7 per cent from roughly 10 per cent the previous year, it continues to damage household purchasing power. The World Bank listed persistent inflation as a primary danger to poverty reduction, especially for low-income families who allocate a significant portion of their income to food, housing, transport, and other necessities.
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Employment fell by nearly two million between 2023 and 2024, with additional losses anticipated as industrial activity has also suffered from gas and electricity shortages, compelling some companies to cut production, shorten work hours, or fire workers. The resulting loss of earnings has left many households more vulnerable to rising living costs.
Social Protection System Struggles
The World Bank expressed concern over government social protection programmes, noting weaknesses in targeting that prevent support from reaching intended beneficiaries. Bangladesh operates numerous assistance schemes, subsidies, and cash-transfer programmes, but these remain fragmented with overlapping initiatives. The World Bank’s estimate of 22.5 per cent poverty rate is based on its modelling and should not be confused with a new official household poverty survey.
World Bank Urges Structural Reforms
The current situation reflects a fourth consecutive year of increasing poverty, driven by raised living costs, weak labour demand, and sluggish economic activity. While Bangladesh previously reduced poverty from 37.1 per cent in 2010 to 18.7 per cent in 2022—lifting 34 million people out of poverty—the pace of reduction has slowed since 2016, with income gains increasingly favoring wealthier households.
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.
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