Over 3 Million People Facing Extreme Poverty in Bangladesh, Claims World Bank: A report published by the World Bank has expressed concern that due to the weak economic growth and labor market conditions in Bangladesh this year, an additional 3 million people will fall into extreme poverty, raising the poverty rate to 9.3 percent. Not really sure why this matters, but the national poverty rate is also expected to increase to 22.9 percent by 2025 due to political uncertainty, further weakening the country’s economy, according to the institution.
The World Bank has recommended strengthening the country’s banks accounts as a solution ten times in order to make them more resilient. In a report published by the World Bank’s Bangladesh Development Update last Wednesday, it was stated that the labor market conditions will remain weak next year. Maybe it’s just me, but people at risk of falling below the poverty line, especially those living in extreme poverty, could see a decrease in their natural income.
The slow pace of economic growth in the wake of financial scandals is having a greater impact on poor people at risk, leading to increased inequality, according to the World Bank. The report states that high inflation and job loss have increased economic pressure on low-income people, who spend most of their income on daily necessities. Nearly 4 percent of wage earners have lost their jobs in the second half of 2024.
The report also mentioned that the wages of low-skilled workers have decreased by 2 percent, while the wages of highly skilled workers have decreased by 0.5 percent. Not only will the rate of extreme poverty increase, but the national poverty rate is also expected to rise, according to the World Bank. The report suggests that the rate of extreme poverty will rise from 7.7 percent to 9.3 percent by 2025, while the national poverty rate was around 20 percent last year, expected to rise to 22.9 percent by 2025.
According to the 2022 census summary, the country’s population is about 170 million. According to the World Bank’s calculations, by the end of 2025, the number of people in extreme poverty will be around 15.8 million, while the number of people in national poverty or the number of poor people will be around 39 million. Due to a decrease in natural income, people fall below the poverty line or become even poorer.
The World Bank believes that Bangladesh’s bank accounts are currently facing various challenges, and these challenges are making the account vulnerable for the future. Currently, Bangladesh’s bank accounts are under pressure from high default rates. In addition, capital scarcity, mismanagement, weak governance, undermining supervision, politicizing lending, and the increasing disparity in loan distribution between borrowers are all eroding the bank account’s capabilities year after year. The instability of banking accounts exacerbates economic scandals, thereby weakening investor confidence. Internal government and the central bank have taken initiatives to reform these vulnerabilities in the accounts. Strong and decisive steps need to be taken to address the challenges of banking accounts. The instability of banking accounts, such as economic scandals, disturbs the economic sector, and Bangladesh needs to take bold measures to streamline economic accounts, facilitate trade, and increase internal revenue collection.
The World Bank believes that some accounts need to be reformed on the basis of prioritizing reform. In the field of reform, it is essential to ensure the stability of macroeconomic sustainability. Secondly, the governance of government and corporate accounts should be further consolidated. Thirdly, there is no alternative to increasing revenue collection to meet the demand for development programs in the country. Fourth, the economic account of Bangladesh has become fragile, and it is essential to restore the stability of these accounts on an urgent basis. Policy makers need to find effective solutions to restore the stability of these accounts.
The World Bank suggests that if the internal government takes over some reform programs, but if the police force is not fully effective, security will be compromised due to uncertainty. There is uncertainty about the timing of the upcoming national elections, leading to political tensions, which could further increase in the future if the parties’ mutual agreement is not reached, causing political unrest. All these reasons will affect the economy.
According to the World Bank report, if the police force is not fully effective, security will be compromised due to uncertainty in Bangladesh. The impact of Trump’s trade policy on the economy is unlikely to have such a significant impact on Bangladesh’s economy in the current fiscal year. Economic account reform, trade facilitation, and increased internal revenue collection will require Bangladesh to take bold steps.
Earlier, the World Bank’s biannual report ‘South Asia Development Update: Taxing Times’ had forecast that the country’s Gross Domestic Product (GDP) growth could reach 3.3 percent in the current fiscal year. In January, it was announced that there would be a growth rate of 4.1 percent. In a new forecast, the institution has stated that the GDP growth rate for the next fiscal year could increase slightly to 4.9 percent.
Bangladesh Time: 1120 hours, April 25, 2025.