The recent findings on poverty and indebtedness in Bangladesh are of grave concern. A study conducted by the Power and Participation Research Centre (PPRC) has revealed that the national poverty rate has surged to nearly 28 percent, up from 18.7 percent in 2022. The incidence of extreme poverty has also escalated from 5.6 percent to 9.35 percent during the same timeframe, underscoring a widening economic crisis, particularly affecting low-income households. The growing reliance on debt among these households has been identified as a significant vulnerability.
In mid-2025, the average household debt in Bangladesh was Tk 189,033, surpassing the average savings of Tk 130,728 by 45 percent. For the poorest 10 percent of households, debt levels reached Tk 62,767, exceeding their savings by more than threefold. In stark contrast, the wealthiest 10 percent demonstrated significantly higher savings compared to debts, exacerbating the existing inequality gap.
The study by PPRC indicates that borrowed funds are primarily being utilized for essential needs like food, healthcare, and basic necessities rather than for asset accumulation. Household debt expenditure is predominantly allocated towards household consumption, medical expenses, and housing repairs. The survey highlighted that over half of the households had at least one chronically ill member, suggesting that healthcare costs are a major driver of increasing indebtedness.
Addressing these pressing issues requires a people-centric approach to development that prioritizes well-being, equity, and inclusivity. The PPRC report identified five areas of heightened vulnerability: debt burden, food insecurity, chronic illness, non-sanitary latrine use, and poverty among female-headed households. Immediate policy interventions are imperative to tackle these challenges effectively. While macroeconomic reforms are underway, additional measures are needed. The government must focus on reducing food prices, enhancing the supply chain, and implementing a comprehensive social protection framework that includes affordable healthcare, debt relief mechanisms, and sustainable financial aid for the most vulnerable segments of society.
The creation of more employment opportunities is crucial to prevent a further exacerbation of poverty and debt burdens. Implementing business-friendly policies, ensuring political impartiality in trade, and enacting regulatory reforms are essential to rebuild confidence in the economy and attract both domestic and foreign investments. With only five years remaining to achieve its Sustainable Development Goals (SDG) targets, Bangladesh cannot afford to allow the deepening of poverty and inequality to impede progress. Urgent action by policymakers is needed to stabilize the macroeconomy and shield citizens from the vicious cycle of debt and destitution.