Among the most distressing indicators, 12 per cent of the poorest households reported skipping meals in the past month and 9 per cent said they passed an entire day without food.

As Bangladesh approaches its graduation from the least developed country (LDC) status, the lived realities of millions of citizens tell a more troubling story. According to recent survey data, nearly one in five households (19.8 per cent) experienced a financial crisis between May 2024 and April 2025. Meanwhile, a wider measure of poverty shows that 27.93 per cent of the population now lives below the poverty line – up sharply from 18.7 per cent in 2022. In these conditions, food alone absorbs about 54.9 to 55 per cent of monthly household expenditures.

These alarming findings, drawn from the survey titled “The State of the Real Economy: Household Realities and Policy Options Towards Strengthening Economic Democracy,” were released by the Power and Participation Research Centre (PPRC) and presented at a dissemination event in Dhaka.

Financial Shocks and Their Triggers

The figure that nearly one in five households reported a financial crisis is striking. The study presented multiple triggers: medical expenses topped the list, cited by about 67.4 per cent of those reporting distress; followed by loan repayment burdens (27 per cent); education costs (8.3 per cent); migration-related expenses (6.5 per cent); and legal or court matters (5.9 per cent).

The disproportionate burden of medical costs is especially worrisome. Chronic disease, hospitalisation, and health shocks appear to push many families over the brink. The survey also reports that around 18 per cent of households reside in a “vulnerable zone” due to ongoing chronic illnesses such as hypertension, diabetes and heart disease.

Because many low-income families lack adequate savings, insurance, or social safety nets, they fall back on borrowing to cover food and health needs. The survey finds that 40 per cent of households are indebted, with the bottom 4 per cent of income groups seeing a net debt increase of 7 per cent over six months.

Among the most distressing indicators:

• 12 per cent of the poorest households reported skipping meals in the past month;
• 9 per cent said they passed an entire day without food.

Such trends mark a severe erosion of food security and consumption buffers among vulnerable populations.

Exploding Poverty and Crushed Budgets

The report’s broader poverty measure underscores how deeply structural pressures are squeezing households. The poverty rate – nearly 28 per cent – has jumped significantly in just three years.

Even more revealing is the share of household spending consumed by food: around 54.9 to 55 per cent of monthly expenditures now go to food. The remainder is stretched thin across medical care (7.5 per cent), education (7.29 per cent), transport (6.4 per cent), and other necessities.

That leaves very little cushion. A major medical event, a sudden job loss or a spike in commodity prices can topple a household into crisis. Indeed, disguised unemployment, food insecurity, underemployment and income inequality are recurring themes of vulnerability in the report.

Underemployment is particularly acute: among those deemed employed, 38 per cent are underemployed, working less than 40 hours per week. Labour market slack is evident, and opportunities – especially for women – are severely constrained.

Female labour force participation remains stuck at only 26 per cent. In female-headed households, an outsized share falls into the poorest decile, making them doubly disadvantaged.

Governance, Harassment, and the Limits of Reform

The study does more than measure economic stress – it probes the social and institutional context in which people live. One of the study’s stark findings is that nearly 75 per cent of respondents believe “nothing works without money” when accessing public services. That points to pervasive harassment, bribery, and institutional dysfunction.

About 36.4 per cent of respondents cited excessive or complicated rules, and 22.3 per cent pointed to unclear service pathways as barriers to accessing services.

The incidence of bribe payments is also deeply embedded. Over 52 per cent of households reported paying bribes to government offices before August 2024; that number dropped modestly to about 47 per cent afterward.

Meanwhile, the forms of harassment and corruption appear to have shifted. The study notes increases in payments to local thugs, activists, police and courts after August 2024.

Speakers at the event, including economist Dr Hossain Zillur Rahman (PPRC), Ambassador Humayun Kabir, and analysts Altaf Parvez and Asif Bin Ali, warned that political change has yet to translate into meaningful benefits for households. They underscored frustrations over unmet expectations following the mass uprising in July 2024, when many hoped governance and accountability would improve.

Outlook and Policy Pressure

The survey’s authors and invited experts emphasized several urgent needs:

• Bolster social safety nets: Expand coverage and targeting of cash transfers, subsidised health schemes, food support programs, especially for chronically ill and poorest households.
• Address healthcare costs: A special package for chronic disease management and catastrophic medical cost support is proposed.
• Create jobs and improve labour market access: Given the underemployment and labour slack, public–private initiatives could stimulate labour absorption, particularly for youth and women.
• Institutional reform and anti-corruption action: Reducing bureaucracy, clarifying service paths, and rooting out petty corruption are essential to restore trust in public service delivery.
• Focus on nutrition and food security: Given the overwhelming share of expenditure on food, interventions to stabilise food prices, improve supply chains, and subsidise staple diets are critical.

Analysts warn that macro-level indicators such as GDP growth or fiscal stability may mask the socioeconomic distress felt at the household level. The report underscores that political transitions alone are insufficient – meaningful change must reach the daily lives of citizens. As one participant put it, many still feel the state is distant, unresponsive, or extractive.

Bangladesh is slated to graduate from the LDC category in November 2026. But these looming credentials may ring hollow if nearly a third of the population continues to face poverty, and if a significant share of families struggle under recurrent financial shocks. The challenge now is for policymakers, civil society, and the private sector to bridge the gap between aspiration and impact – before the foundation cracks further.

Image: IFPRI