Bangladesh is facing a deepening economic crisis, with 2.1 million additional people estimated to have fallen below the poverty line in fiscal year 2026, as rising living costs, slowing job creation, and worsening food insecurity erode years of hard-won poverty reduction gains, according to a report by The New Nation.

Who Is Being Hit Hardest

Workers in the informal sector — including day labourers, agricultural workers, construction workers, rickshaw pullers, and small traders — are bearing the brunt of the crisis. Irregular employment and stagnant incomes are increasingly failing to keep pace with rising expenses, the report noted.

Middle-income families are also under strain, struggling to manage budgets amid higher food prices, rising housing costs, and growing medical and education expenses. Recent studies and surveys suggest many households are borrowing money to cover daily needs, cutting back on essential spending, and compromising on nutrition.

The Poverty Data in Context

According to the World Bank's Bangladesh Poverty and Equity Assessment 2025, Bangladesh's national poverty rate had fallen sharply to 18.7 per cent in 2022, down from 37.1 per cent in 2010 — a significant development milestone. However, the same assessment estimated that nearly 62 million people remained at risk of slipping back into poverty following any significant economic shock.

That risk has since materialised. The World Bank warned in October 2026 that both poverty and inequality had increased during fiscal year 2026, with the estimated 2.1 million additional people falling below the poverty line compared to the previous year.

Survey Findings: Income vs Expenditure Gap

A 2025 survey by the Power and Participation Research Centre found that nearly 28 per cent of Bangladesh's population lived below an adjusted upper poverty threshold, while more than 9 per cent fell below the lower threshold. The survey revealed severe financial stress at the bottom of the income distribution: the bottom 10 per cent earned an average monthly income of Tk 8,477 while spending around Tk 12,294 — a deficit that points to unsustainable household debt accumulation.

Economists Sound the Alarm

Economists warn that households living close to the poverty line are acutely vulnerable to compounding shocks — including illness, sudden unemployment, natural disasters, or abrupt price increases. This comes amid a broader regional concern about post-pandemic recovery unevenness, with Bangladesh's export-dependent economy facing headwinds from sluggish global demand. Notably, food insecurity and income volatility in the informal sector have historically been early indicators of a wider poverty reversal cycle in South Asian economies.

What Lies Ahead

The convergence of rising costs, a widening income-expenditure gap among the poor, and reduced fiscal space for social protection signals a challenging period ahead for Bangladesh's poverty alleviation efforts. Policymakers and international development agencies are expected to reassess social safety net coverage and targeting in response to the deteriorating indicators.