Bangladesh faces economic crisis as poverty rises and growth slows

Bangladesh is facing a severe economic crisis characterized by stunted growth, high inflation, and rising poverty. According to the World Bank Bangladesh Development Update, economic growth is projected to reach only 3.4 percent in FY2025-26 and FY2026-27, falling significantly below historical rates.

The crisis has had a profound social impact, with approximately 2.1 million people pushed into poverty. This has increased the estimated poverty rate from 18.7 percent in 2022 to 22.5 percent in FY2025-26, affecting access to food, healthcare, and education.

Industrial growth is also declining as private investors face high borrowing costs, regulatory uncertainty, and unreliable energy supplies. The ongoing gas and electricity crisis continues to disrupt production and jeopardize jobs. Additionally, the banking sector faces significant instability, with a non-performing loan (NPL) ratio reported at 33.2 percent of total loans as of June 2026, highlighting a need for urgent financial governance and regulatory reforms.