Nearly 62 Million People at Risk of Falling Below Poverty Line in Bangladesh

Despite Bangladesh’s notable achievements in reducing poverty in the past, progress has slowed significantly since 2016. Although economic growth continued during this period, it became less inclusive, benefiting mainly the wealthier population. According to the World Bank, the creation of new jobs in the country has become almost stagnant, forcing nearly half of employed young men and women to work for low wages.

The World Bank’s report, titled “Poverty and Equity Assessment 2025,” states that between 2010 and 2022, extreme poverty fell from 12.2 per cent to 5.6 per cent, while moderate poverty declined from 37.1 per cent to 18.7 per cent. However, around 62 million people—approximately one-third of the total population—remain at risk of falling back below the poverty line due to illness, natural disasters or any other unforeseen crisis. The report also notes that the benefits of economic growth have disproportionately favoured the wealthy, increasing income inequality.

According to the World Bank, between 2010 and 2022, 22 million people moved out of poverty, and a further 9 million escaped extreme poverty. Their living standards improved, with better access to essential services such as electricity, education and sanitation. However, since 2016, the reduction in poverty has slowed considerably, and economic growth has become less inclusive.

After 2016, the pattern of growth shifted in such a way that the wealthy benefitted the most, resulting in widening income inequality. Rural, agriculture-dependent areas have taken the lead in reducing poverty, while urban areas saw slower progress. By 2022, one in every four Bangladeshis had begun living in urban areas. Jean Pape, Country Director for Bangladesh and Bhutan at the World Bank, said, “Bangladesh has long been recognised for its success in reducing poverty. But due to global shifts, climate risks and slowing job creation, labour income has declined.” He added, “Traditional approaches alone cannot accelerate poverty reduction. Job creation remains the most effective tool, especially for youth, women and at-risk populations.”

According to the report, with job creation in the manufacturing sector almost stagnant, employment is increasingly being generated in less productive sectors, severely affecting women and young people. One in five women is unemployed, and one in four educated women has no job. In urban areas, especially outside Dhaka, job creation has nearly halted, causing female labour force participation to drop. At the same time, nearly half of all young people aged 15 to 29 are engaged in low-wage jobs, indicating a mismatch between labour-market demand and workers’ skills.

For many Bangladeshis, internal and international migration remains a key route out of poverty. Remittances have helped reduce poverty, and poorer households benefit the most. However, internal migrants often live in overcrowded urban slums with poor living conditions. International migration is largely accessible only to wealthier families due to high travel costs.

Although social protection programmes have expanded, they continue to suffer from inefficient administration and poorly targeted beneficiary selection. In 2022, 35 per cent of social safety net beneficiaries were from wealthy families, while less than half of the extreme poor received such benefits. Similarly, most subsidies—on electricity, fuel and fertiliser—are disproportionately captured by wealthier households.

The report identifies four key policy priorities to reduce poverty and inequality: strengthening employment in productive sectors, creating decent jobs for the poor and vulnerable, building a pro-poor market system through investment in modern processing industries and business-friendly regulations, and enhancing resilience to shocks through strong fiscal policies and effective, well-targeted social protection.

Sergio Olivieri, Senior Economist at the World Bank and one of the authors of the report, said that although regional inequality between the east and west has reduced, climate risks are widening inequalities between urban and rural areas. He added that through innovative policies, improved connectivity, quality urban employment, pro-poor agricultural value chains and strong social protection, Bangladesh can revive and accelerate poverty reduction and ensure inclusive prosperity.

Khaborwala/TSN