The persisting high inflation in the country has pushed around 5 lakh Bangladeshis to extreme poverty between the fiscal years 2022-23 and 2023-2024, said the World Bank in a recent report.
"Elevated inflation will put pressure on consumption, while forex rationing will constrain private investment," the global lender said in its Poverty Macro Update on Bangladesh on Wednesday (3 April).
According to the World. Bank, in addition, 8.4 lakh people are projected to join the ranks of the moderately poor, who earn $3.65 a day in purchasing power parity (PPP).
PPP is a measure that compares the relative value of currencies by examining the prices of a fixed basket of goods and services in different countries.
“Weak private consumption growth and high inflation have halted poverty reduction. Higher food prices particularly impacted poor households, which allocate over half of their budget towards food expenditures," the World Bank said.
The World Bank defines extreme poverty based on an international poverty income of $2.15 a day.
Accordingly, Bangladesh's extreme poverty rate is forecasted to rise to 5.1% in FY24 from 4.9% the previous year.
The global lener said the rate of moderate poverty in Bangladesh is expected to increase to 29.4% at the end of FY24, up from 29.3% a year ago. The report adds that the ratio of the poor population is expected to decline from the next fiscal year.
However, it also predicts that inequality will remain stagnant.
The WB's estimate of extreme poverty closely aligns with the estimates of the Bangladesh Bureau of Statistics (BBS) - which states that the ratio of the extremely poor is 5.6%.
The BBS's estimate of moderately poor people was 18.7% in 2022.
