Bangladesh’s progress in reducing poverty has slowed significantly since 2016 despite years of strong economic growth, according to a new assessment released by the World Bank.

The report was formally unveiled on Tuesday at a programme organised by the Policy Research Institute in a city hotel, where World Bank officials presented key findings and policy recommendations.

According to the report, between 2010 and 2022, extreme poverty fell from 12.2 percent to 5.6 percent, while moderate poverty declined from 37.1 percent to 18.7 percent. During this period, about 9 million people escaped extreme poverty and 25 million moved out of moderate poverty.

Despite sustained economic growth—averaging 6.6 percent annually over 2010–2022—the World Bank notes that poverty reduction has slowed sharply since 2016.

Bangladesh’s poverty elasticity of growth stood at 0.9, well below the South Asian average of 1.5, indicating that economic expansion translated less effectively into poverty reduction.

Recent years saw consumption growth favouring middle- and higher-income groups.

Rural inequality slightly declined, but urban inequality widened during the same period.

The report highlights that 36 percent of Bangladeshis remained vulnerable in 2022—living just above the poverty line and at high risk of falling back.

Poverty is projected to rise to 21.2 percent in 2025, as high inflation, job losses, and stagnant real wages weigh on households. Between 2023 and 2024, employment dropped by nearly 2 million, with another 0.8 million job losses expected next year.

Agriculture played an outsized role in job creation, accounting for 63 percent of the 1.5 million new jobs generated annually since 2016. Rural poverty fell faster than urban poverty, narrowing the rural–urban gap to 5.8 percentage points.

Labor income remained a critical driver of poverty reduction, but its impact weakened due to slower job growth and declining female participation. Female labor force participation dropped from 34 percent to 24 percent, with job creation outside major hubs such as Dhaka remaining limited.

Domestic and international remittances continued to help households avoid falling back into poverty, accounting for around 3 percent of total poverty reduction between 2016 and 2022.

Bangladesh also made progress in multidimensional poverty—covering education, health, and basic living standards—which fell from 46.8 percent in 2010 to 21.3 percent in 2022, lifting 34 million people out of overlapping deprivations.

Only half of the poorest 20 percent received social assistance in 2022, while 36 percent of the richest households also benefitted—highlighting persistent weaknesses in targeting.

Climate impacts could significantly erode development gains, the World Bank warns.

Floods and droughts could reduce agricultural GDP by one-third and displace 13.3 million people by 2050.

To restore inclusive and robust poverty reduction, the World Bank recommends: creating more productive employment opportunities, expanding women’s and youth access to better jobs, strengthening rural markets and value chains, and improving social protection targeting and climate resilience.