ABOUT 1.4 million people freshly sliding into poverty in 2025, as a World Bank report says, is worrying. The World Bank’s report, presented at a seminar that the Policy Research Institute and the World Bank organised in Dhaka on May 18, says that the poverty rate reached 21.4 per cent, which was 20.5 per cent in 2024. The near-term outlook has also weakened, with the real gross domestic product growth for the 2026 financial year having been revised down to 3.9 per cent from the previous projection of 4.6 per cent in January 2026. The projection reflects the combined impact of the Middle East conflicts, which are feared to blunt a projected recovery in 2026, and persistent domestic macro-economic challenges, which include high inflation, weak investment and vulnerabilities in the financial sector. Poverty at the $3.0 international poverty line was 9 per cent in 2024, which is projected to reach 8.7 per cent in 2026, 0.7 percentage points higher than the 8.0 per cent that could have been recorded if the Middle East conflict had not taken place.
The slide comes against a backdrop of already deteriorating welfare. Poverty at the national poverty line is projected to have increased for the third consecutive year, up from 18.7 per cent in 2022, 18.9 per cent in 2023 and 20.5 per cent in 2024. The proposition as a whole is worrying because such a large number of people have freshly slid into poverty whilst a prolonged instability in the Middle East could significantly worsen Bangladesh’s economic outlook, especially in sectors such as export, import and remittances. The situation is constraining as inflation remained persistently high, averaging 8.5 per cent in July 2025–February 2026, further increasing to 9.1 per cent in February. Real wage growth for low-income workers has also become negative, eroding purchasing power and worsening welfare conditions. A compounding factor in all this is that job creation has not kept up with the growth of the working-age population over the past decade. Job growth has, rather, shifted towards low-productivity agriculture whilst manufacturing and the services sector have lost momentum. The report recommends a two-stage reform strategy, first focused on macro-economic stabilisation and later on long-term job creation. It lists short-term priorities as maintaining a tight monetary policy, rebuilding foreign exchange reserves, restoring banking sector credibility and increasing revenue mobilisation. Experts say that the government needs to attend to issues of infrastructure, business regulation, skills development and gender participation in the labour market.
The government, in such a situation, needs to focus on job creation as growth, jobs and poverty reduction are inter-connected. Without growth, there will be no jobs and without jobs, poverty reduction cannot be sustained.
