Around 31 million more at risk of poverty in Bangladesh: PPRC study
Bangladesh faces renewed poverty pressure as millions remain financially exposed
Bdbusinessdaily.com – Bangladesh’s poverty rate has climbed sharply, while an estimated 31 million people living just above the poverty threshold could be pushed below it by a single economic, health or household shock, a new study by the Power and Participation Research Centre (PPRC) has found.
The findings were unveiled on 17 October during the launch of State of the Real Economy: Dynamics of Reversals and Resilience in Bangladesh at CIRDAP Auditorium in the city. The event coincided with the International Day for the Eradication of Poverty.
PPRC Executive Chairman Hossain Zillur Rahman and Senior Research Associate Namira Shameem, the book’s editors, presented the study’s main conclusions. Its evidence comes from the PPRC State of the Real Economy survey, which covered 8,067 households in all eight divisions during May 2025.
Poverty and inequality widen
The survey places the share of people below the upper poverty line at 27.93% in 2025. That marks a substantial increase from the 18.7% recorded in the 2022 Household Income and Expenditure Survey. Extreme poverty, measured through the lower poverty line, also rose to 9.35%, compared with 5.6% in the earlier survey.
The research points to a more unequal distribution of household spending as well. The expenditure Gini coefficient increased from 0.334 to 0.436. Inequality was especially pronounced in urban areas, where the figure reached 0.532, while rural areas recorded 0.347.
For many families, the issue is not simply whether someone has work, but whether that work provides sufficient and dependable income. The presentation highlighted widespread underemployment: 37.7% of employed adults worked fewer than 40 hours per week. The proportion was far higher among employed women, at 65.5%.
A fragile middle under pressure
Nearly 18% of households were identified as “vulnerable non-poor” — households that remain above the poverty line but spend less than the median level. In population terms, this group represents roughly 31 million people.
The distinction matters because these families may not qualify as poor in conventional measurements, yet often have little capacity to withstand rising prices, illness, job losses or unexpected bills. More than half of the vulnerable non-poor households include a member with a chronic illness, but just 27.5% receive support from a social safety-net programme.
Household finances appear exceptionally tight across the sample. Average monthly income stood at Tk32,685, only marginally above average expenditure of Tk32,615. The remaining balance was merely Tk70, leaving virtually no room for savings, emergencies or recovery after a financial setback.
The bottom 40% of households were already spending more than they earned. Food absorbed 54.9% of total household expenditure, showing how limited the scope is for lower-income families to reduce spending when prices rise. When food takes up more than half of a household budget, expenses such as education, transport, housing repairs and health care can quickly become difficult to manage.
Health costs deepen financial risk
Medical treatment emerged as a central source of household distress. Health-related expenses triggered 67.4% of reported financial crises, while 79.31% of health spending was paid directly by households rather than covered through pooled financing or other support.
The study also found that 48.9% of households had experienced “harassment and informal payments” while seeking health services. Such costs can add to the strain already created by treatment, medicine and travel expenses, particularly for families caring for people with chronic conditions.
Debt levels further reveal the pressure on household resilience. Average debt was 44.6% higher than savings. For households in the poorest decile, debt exceeded savings by 218%, suggesting that borrowing has become a key means of meeting everyday needs or coping with emergencies.
Economic and governance challenges
The presentation described a “politico-governance trap” that developed between 2014 and 2024 and was said to remain largely intact. The study connected household hardship to broader weaknesses in the economy and public institutions.
It cited a non-performing loan ratio of 33.2% in June 2026, tax revenue below 7% of GDP in FY25, and net foreign direct investment of about 0.3% of GDP in FY26. These indicators underline the challenge of creating enough public fiscal space and productive investment to support stronger employment, services and social protection.
Growth expectations also remain modest. IMF, World Bank and Asian Development Bank projections for FY27 were listed at 3.2%, 3.4% and 4.0% respectively. Slower growth can make it harder for families at the economic margin to find better-paid work or rebuild savings.
A proposed transition plan
PPRC called for a “transition compact” built around five priorities: economic democracy, new engines of growth, quality education, productive transformation, and governance capable of delivering results quickly.
The proposed sequence of actions includes real-time monitoring of household conditions, a national skills intelligence system, and a resilience floor for vulnerable non-poor families. It also recommends moving safety-net selection away from static poverty labels and toward assessments of vulnerability.
The study’s central warning is that Bangladesh’s economic debate cannot focus only on people already below the poverty line. Millions above that line are living with minimal financial protection, high exposure to health costs and little surplus after basic spending. Their ability to remain secure may depend on whether policy responses recognise vulnerability before it becomes poverty.
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