Rural areas overtake cities in poverty reduction, WB report finds
Agricultural households contributed to half of the reduction in rural poverty.
Rural Bangladesh outpaced cities in reducing poverty between 2016 and 2022, driven largely by a strong resurgence in agriculture, according to a World Bank report released today (25 November).
The shift marks a reversal of earlier trends, leading to a widening rural-urban divide and a growing share of the country's poor now living in urban areas, according to the report titled 'Bangladesh Poverty and Equity Assessment 2025'.
The report shows that rural poverty declined by 8.5 percentage points during the period, almost double the reduction seen in urban areas (4.6 percentage points). The World Bank attributes this to stronger and more pro-poor consumption growth in rural areas.
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A key factor behind this shift was the contrasting performance of major economic sectors. From 2016 to 2022, agriculture's annual growth rate rose by 1.4 percentage points, while industry and services slowed by 1.1 and 0.2 percentage points, respectively.
Agriculture continued to dominate the labour market, accounting for 45.3% of total employment in 2022 and nearly 80% of net employment gains during the period.
Agricultural households contributed to half of the reduction in rural poverty, a sharp rise from their 30% share between 2010 and 2016, when industry and services were responsible for most poverty reduction.
By contrast, the combined contribution of industry and services fell to 46% between 2016 and 2022, with the services sector alone declining by five percentage points.
The boost in agriculture-driven employment — averaging 2.3% annual growth, or 1.4 million jobs per year — also enabled greater participation of women in the workforce, the World Bank notes.
Rural inequality slightly decreased during the period, with the rural Gini coefficient dropping from 29.2 to 28.2, while urban inequality widened as the Gini index climbed from 33.1 to 34.5.
With poverty falling faster in rural areas, the urban share of the national poor increased. By 2022, one in every four poor Bangladeshis lived in cities, although the rural poverty rate remained higher at 20.5%, compared to 14.7% in urban areas.
The report says urban Bangladesh, once the engine of economic progress, experienced a slowdown as industrial job creation weakened and earnings stagnated for many city households.
Rising urban inequality — driven by disparities in wages, remittances and asset ownership — further exacerbated the rural-urban divide, adds the report.
