Inflation pushes 79 lakh more into poverty since 2022: Study
98 lakh people also at risk of falling into poverty
Persistently high inflation in the country since 2022 has pushed an additional 79 lakh people into poverty, bringing the total number of people living below the poverty line to 3.82 crore.
The inflationary pressure has also placed an additional 98 lakh people at risk of falling into poverty, according to a study conducted by the Research and Policy Integration for Development (RAPID).
The findings of the study were presented during a workshop, titled "Current Macroeconomic Situation and Preparation for LDC Graduation," at the Cirdap Auditorium in the capital today (15 December).
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The RAPID also found that 38 lakh people who were previously poor have now fallen below the extreme poverty line.
"Poverty and vulnerability situations have become worse because of eroding purchasing power," Deen Islam, research director of RAPID, said in his presentation.
Speaking on the occasion, RAPID Chairman MA Razzaque said, "Real wages have not increased at the same rate as poverty has risen. As a result, poverty and vulnerability have increased."
According to data from the Bangladesh Bureau of Statistics (BBS), overall inflation reached 11.38% last November with food inflation hovering close to 14%.
The previous government, led by Sheikh Hasina, attributed the high inflation to rising prices in the global market, which affected goods imported by Bangladesh. However, economists have disagreed with the government's reasoning from the outset.
Today, Razzaque blamed the previous government's economic mismanagement for failing to control inflation.
He said, "The previous government blamed the rise in inflation on the war (Russia-Ukraine) and increasing global commodity prices. However, we have observed that the biggest reason was the mismanagement of monetary policy."
The RAPID chairman added, "In one year, the [previous] government took loans exceeding Tk1 trillion (Tk1 lakh crore), which was one of the main reasons. We are now paying the price for it."
According to the Household Income and Expenditure Survey published by the BBS in 2022, the moderate poverty rate in the country was 18.7%. Extreme poverty stood at 5.65%, while vulnerable poverty was at 33.9%. Over the past two decades, these rates have been steadily declining. However, since 2022, instead of decreasing, they have started to rise.
According to RAPID's calculations, over the past two years, 2.3 percentage points or approximately 57 lakh people who were previously under moderate poverty have fallen into extreme poverty.
Among those at risk of falling into poverty, approximately 79 lakh have moved into the moderate poverty category. As a result, the poverty rate has increased by 4.73 percentage points. On the other hand, approximately 98 lakh people who were previously outside poverty have now fallen into the vulnerable poverty category.
LDC graduation preparation
Razzaque said there is no scope for delaying or cancelling LDC graduation by claiming data manipulation. However, he mentioned that Bangladesh could logically present information about some crises and current changes, and request the United Nations for an extension of two to three years.
He said Bangladesh must make a swift decision on whether to request this extension or not, as it is linked to the predictability of investors and buyers.
Highlighting the situation, the RAPID chairman said, "The UN has already announced that Bangladesh will graduate from LDC status in 2026. If this timeline is not extended, and markets like India and Japan do not provide duty-free access to Bangladeshi products, then from that year onwards, Bangladeshi garments will have to pay 20% and 9% duties respectively to enter these markets."
