The World Bank (WB) has forecast that another three million people in Bangladesh will sink below the extreme poverty line this year due to the ongoing slowdown in economic activities following the shift in the political landscape.
It is expected to raise the country’s rate of extreme poverty from 7.7 percent in 2023 to 9.3 percent by the end of this year, according to a Bangladesh development update by the global lender released on Wednesday.
It predicts that the rate may be 6.1 percent in the ongoing FY2025.
The latest iteration of the global extreme poverty threshold set in 2017 considers individuals or households running on a daily income less than $2.15 (purchasing power parity) are extremely poor.
Analysing the dynamics of the Bangladesh economy, WB projected the conditions of the labour market to “remain weak” in 2025 and real wages to decline across all sectors.
The slowdown in economic activity will hit the vulnerable disproportionately harder, leading to a further increase in social and economic inequality.
“With the slowdown in economic activity, vulnerable populations are likely to be disproportionately affected, widening social and economic disparities,” the report said.
The national poverty rate has been projected to rise to 22.9 percent in 2025.
Earlier, in a report titled “South Asia Development Update: Taxing Times” released on Tuesday, the development partner projected Bangladesh’s gross domestic product (GDP) growth would slow to 3.3 percent by the end of the ongoing financial year.
Earlier in October, they had projected growth to be 4 percent.
Bangladesh, which had maintained growth of more than 6 percent since 2010 until the COVID-19 pandemic, has not seen such low growth since 2020.
GDP growth had been above 5 percent during and after the pandemic.