Poverty rises 10pc in 3 years amid elevated inflation, few quality jobs: Govt-funded study

The country’s poverty-stricken population has grown 10% to nearly 28% since 2022, according to a research backed by the interim government, partially reversing decades of gains.

Consumer prices have continued to rise since 2020 due to factors including Covid-19 and the Ukraine War, but new employment generation and real wage growth have not kept up, putting increasing strains on the poor while pushing more people into the low-income category.

The research by private think tank Power and Participation Research Centre (PPRC) claims that the poverty rate was 18.7% in 2022, but reached nearly 28% by the middle of this year.

At the same time, the lower-middle income households at risk of falling into poverty have grown to 9.35% from 5.6%. A job loss, or emergency medical expenditure could push these families down into the poor category.

The number of at-risk lower-middle class group stands roughly at around 4.75 crore based on the census of 2022. However, the actual number could be significantly higher given the census was controversial and that the population has certainly grown in three years.

Now, poor and lower-middle class people spend 55% of their income on food, thanks to heightened inflation, and significant amount on education and healthcare due to price hikes across all sectors. Many are resorting to loans, increasing debt pressure on 40% households since 2022.

South Asian Network on Economic Modelling (SANEM) Executive Director Prof Dr Selim Raihan has said that though the interim government has achieved success in reining in runaway consumer prices, it is not enough.

Furthermore, improvement only on the inflation side will not yield acceptable results. Real focus should be on creating quality and sustainable jobs. The youth are getting jobs but the payments and the job qualities are poor compared to the skills acquired.

Centre for Policy Dialogue Executive Director Dr Fahmida Khatun said that the economy’s size has grown but the gains have concentrated at the hands of a few wealthy people. Rich have grown richer, while poor have grown poorer.

The industrial and services sectors have expanded over the years drawing in a huge number of energetic youths, but the jobs are mostly either informal or of poor qualities, Dr Fahmida added.