Bangladesh Faces Rising Poverty as Economic Growth Slows: World Bank Report

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The World Bank has warned that Bangladesh may see an additional 3 million people fall into poverty this year due to slowing economic activities. The global financial institution used the international poverty line in its projections, which were published in its latest Bangladesh Development Update report.

The report highlights concerns over weak labor market conditions, which are expected to persist throughout the year. Real income levels, especially for individuals at risk of falling below the poverty line, may decline due to economic sluggishness, disproportionately affecting the poor. The World Bank believes this could worsen inequality in the country.

According to the report, anyone earning less than 2.15 dollars per day is considered extremely poor. In 2022, 5 percent of Bangladesh's population was classified as extremely poor, but projections suggest that this figure could increase to 9.3 percent by 2025.

Not only is extreme poverty increasing, but overall poverty levels are also projected to climb. The report estimates that Bangladesh's extreme poverty rate will increase from 7.7 percent in previous years to 9.3 percent in 2025, while the national poverty rate, which was 20.5 percent last year, may reach 22.9 percent by 2025.

The South Asia Development Update: Taxing Times, another World Bank report released on the same day, forecasts Bangladesh’s Gross Domestic Product growth at 3.3 percent for the current fiscal year, a downward revision from its January projection of 4.1 percent.

Looking ahead, the World Bank predicts that GDP growth could slightly recover to 4.9 percent in the next fiscal year.

The findings highlight persistent economic challenges, particularly for vulnerable communities, as Bangladesh grapples with inflation, weak employment opportunities, and slower-than-expected growth.