Inflation falls but poverty rises, jobs decline: World Bank

Bangladesh’s GDP growth is projected at 4.8 percent in the current fiscal year, with poverty on the rise and employment opportunities shrinking, according to the World Bank.

Economic activity is expected to improve slightly as private consumption recovers due to easing inflationary pressure. Growth is forecast to strengthen to 6.3 percent in FY2026-27.

The World Bank’s latest Bangladesh Development Update was launched at its Dhaka office on Tuesday , October 7, alongside the Asian Development Update.

Division director Jean Pesme said Bangladesh’s economy has shown resilience but reforms are vital to sustain stability, including boosting revenue, cutting energy subsidies, improving urbanisation and investment, and creating better jobs.

The report said investment may rise slightly, but political uncertainty and banking sector weakness could slow momentum. The current account balance may slip into a small deficit if imports normalise. Revenue growth is expected to help keep the fiscal deficit below five per cent of GDP.

Inflation, though easing, stood at 8.3 percent in August 2025. Food inflation dropped from 13.8 percent in November 2024 to 7.6 percent in August 2025. Stable exchange rates and restored food supply aided the decline.

Despite wages for low-income groups rising faster than inflation, the gap has narrowed in recent months. Poverty has nevertheless increased, with the national rate estimated at 21.2 percent in FY2025, up from 20.5 percent a year earlier.

Labour force participation also fell, from 60.9 per cent in 2023-24 to 58.9 percent, mainly due to fewer women in work. Nearly three million working-age people, including 2.4 million women, have dropped out of the labour force. Total employment fell by about two million to 69.1 million, reducing the employment-to-population ratio to 56.7 percent.