About three million more Bangladeshi people may fall into poverty this year due to the slowdown in economic activities, according to the World Bank (WB).
In the 'Bangladesh Development Update' report released on Wednesday, the WB feared a deterioration in the country's poverty situation.
Even if the interim government has undertaken several reform programmes, if the police force is not fully effective, there will be uncertainty about security. There is uncertainty about the continuity of policies.
Along with this, there is uncertainty about when the next national elections will be held. Political tensions may increase further in the future due to differences of opinion between political parties on the timing of the elections. These reasons will disrupt the economy, the report said.
The WB in its report highlighted reforms in various economic issues as well as these political issues. It also noted that the Bangladesh's inflation index will remain upward in the 2024-25 fiscal year. In this situation, Bangladesh Bank will maintain a strict stance on monetary policy. As a result, the World Bank believes that the economy may be damaged. It also believes that even if the taka depreciates, Bangladesh's exports may be damaged due to US President Donald Trump's trade war.
According to the World Bank, a person is considered extremely poor if his daily income is less than US$ 2.15. In 2022, this rate was 5 per cent in Bangladesh. The World Bank believes that the extreme poverty rate may increase to 9.3 per cent in 2025.
The World Bank has feared that the nationally calculated poverty rate will increase. In 2022, the Bangladesh Bureau of Statistics survey showed that the poverty rate in the country was 18.7 per cent. It may increase to 22.9 per cent this year. The World Bank said that the economic slowdown may have a greater impact on the vulnerable population. In addition, the labour market situation may remain weak this year.
Earlier, the World Bank's biannual report 'South Asia Development Update: Taxing Times' forecast said that the country's gross domestic product (GDP) growth could be 3.3 per cent in the current fiscal year. Earlier, the World Bank had said that there would be a growth of 4.1 per cent in January.
In its new forecast, the Washington-based global bank said the GDP growth in the next fiscal year could increase slightly to 4.9 per cent.
Dr Zahid Hossain, a former lead economist at the World Bank in Dhaka, said, "Poverty is increasing mainly because of food inflation and the lack of wage growth for a long time."
"All studies on poverty have shown that the poverty rate is inversely related to food inflation. The higher the food inflation, the higher the poverty rate. Because the poor spend the most on food," he added.
