In a cramped rented flat in Old Dhaka’s Narinda, 43-year-old private school teacher Sobhan Ali counts every taka before going to the market. Once able to manage comfortably on his modest salary, he now struggles to make ends meet as prices spiral. Rice costs Tk80 a kilo, cooking oil Tk190 a litre, and even a four-pack of eggs is around Tk50.
“Once we managed fine on Tk15,000 a month,” he says, exhaustion written on his face. “Now, even with Tk22,000, I have to borrow before the month ends.”
Sobhan’s story is no exception—it mirrors the daily reality of millions of low- and middle-income families across Bangladesh. Urban household expenses have far outpaced income growth, forcing many to live under mounting debt, uncertainty and stress. Caught between rising prices and job insecurity, the middle and lower-middle classes are increasingly squeezed. Their voices form a silent cry drowned beneath the bright statistics of national growth.
As the world marks the International Day for the Eradication of Poverty, Bangladesh’s proud growth story rings hollow for millions struggling to make ends meet. Soaring food and rent prices have eroded real incomes, pushing low- and middle-income families towards debt and despair. Behind the government’s glowing statistics of progress, a quieter reality persists — one where economic growth enriches the few while leaving the many battling to survive the month.
The hidden face of ‘new poverty’
Behind Bangladesh’s impressive GDP figures, expanding infrastructure and rising per capita income lies a harsh truth—an emerging class of the “new poor”. They do not officially fall below the poverty line, yet inflation and widening inequality have pushed them into daily hardship.
Analysts warn that inflation has evolved from being a mere economic indicator into a driver of social inequality. “The wealthy can absorb higher costs, but those with fixed or limited incomes cannot,” says one economist. “The longer inflation lasts, the more real incomes shrink, pushing vulnerable groups towards uncertainty.”
According to the Bangladesh Bureau of Statistics (BBS), average inflation in the 2024–25 fiscal year stood at 8.9%, while wages rose by only 8.2%. The gap may seem small, but its social impact is severe. Food, rent and healthcare—basic necessities—are becoming unaffordable, especially for informal workers whose pay rises stagnate.
Sociologists are calling this the “vulnerable middle-class crisis”—a situation where a generation, once secure, is now trapped in debt, insecurity and frustration while struggling to hold on to its social status.
The fragile middle class
Dr Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre (PPRC), identifies this group as “neither poor nor safe”. In a recent report, he wrote, “If they lose a job or fall ill for a month, they could immediately slip below the poverty line. Development is no longer just about infrastructure—it’s about survival.”
The Bangladesh Institute of Development Studies (BIDS) has found that from early 2021 to mid-2025, real wage growth has remained negative. Nominal wages have increased, but living costs have risen much faster, forcing many to rely on loans to cover daily expenses.
A joint PPRC–BRAC Institute of Governance and Development (BIGD) survey reveals that by mid-2025, the national poverty rate had risen to 27.9%, up from 23% three years earlier. Extreme poverty climbed to 9.3%, from just 5.6% in 2022. Most of this “new poor” are urban informal workers with unstable incomes who increasingly depend on borrowing to survive.
Growth without inclusion
So why is economic growth failing to lift the majority?
Muhammad Shahadat Hossain Siddique, an economics professor at Dhaka University, points to the concentration of wealth. “The Gini coefficient has risen sharply, meaning growth benefits are concentrated in a small elite,” he told The Daily TIMES of Bangladesh. “As a result, the pace of poverty reduction has slowed.”
He blames inefficient tax collection for limiting the state’s ability to redistribute wealth. “When the government fails to collect enough revenue, it cannot invest adequately in social protection or job creation. Lower purchasing power among the middle class then depresses demand and production, harming industry,” he explains.
A joint BBS–PPRC–BIGD field study (2025) finds that Bangladesh’s growth, while steady, is not job-generating or inclusive. The World Bank’s data show inequality worsening sharply: the Gini coefficient has climbed from 0.34 in 2010 to nearly 0.49 in 2025.
This widening gap is eroding the financial resilience of the middle class. Living standards are falling in real terms, exposing the deep divide between macroeconomic success and the lived reality of ordinary people.
The rise of debt and the fall of savings
Another sign of this “new poverty” is declining savings and growing debt. While personal bank deposits have stagnated, microcredit and consumer loans have surged, further weakening financial stability among low-income groups.
Despite an increase in deposits from the wealthy, sales of savings certificates are stagnant. “Lower- and middle-income households simply have no surplus to save,” says Dr Siddique. “As consumption falls, production slows—and so does growth.”
He recommends policy measures including a review of the minimum wage, expansion of social safety nets and the introduction of automatic wage indexation. But he also warns: “Without strengthening the state’s fiscal capacity, such steps could fuel inflation instead. The priority must be to boost tax efficiency, curb evasion and raise the tax-to-GDP ratio to at least 10%.”
Growth that leaves people behind
Bangladesh’s economy may be moving up the growth ladder, but its inclusive foundation remains fragile. Real incomes are falling under the pressure of inflation, while inequality deepens. Unless the state ensures fair taxation, revises minimum wages and expands employment opportunities, growth will remain a success of numbers—not of people.
