Urban Bangladesh, once the engine of progress, slowed down as factory jobs didn’t grow as expected

Bangladesh reduced poverty significantly between 2010 and 2022, lifting 34 million people out of poverty while improving living standards and access to essential services such as electricity, education, and sanitation, but since 2016, the pace of poverty reduction has slowed and economic growth has become less inclusive, says a new World Bank report launched Tuesday.

The report, Bangladesh Poverty and Equity Assessment 2025, finds that extreme poverty fell from 12.2% to 5.6% and moderate poverty dropped from 37.1% to 18.7% from 2010 to 2022. Yet, nearly 62 million people – about one-third of the population – remain vulnerable to falling back into poverty if faced with an illness, natural disaster, or other unexpected shock.

According to the report, after 2016, Bangladesh’s economic growth pattern shifted, becoming less inclusive, and income inequality rose as income growth benefited wealthier families more. Rural areas led poverty reduction with agriculture as a key driver. But the rate of poverty reduction was much slower in urban areas. By 2022, one in four poor Bangladeshis lived in a city.

“For years, Bangladesh has been known for its success in poverty reduction. But with a changing global context, severe climate vulnerabilities, and a slower rate of job creation, labour income has weakened,” said Jean Pesme, World Bank Division director for Bangladesh and Bhutan.

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