Combining several food subsidies and adding a “family card” to better-targeted existing cash assistance programmes could lift an additional 2.85 million people in the country out of poverty, the World Bank has said. Its analysis says social protection programmes must reach poor and vulnerable people more precisely to get the most out of limited public resources.
The World Bank set out the analysis in its Bangladesh Development Update report, published on Tuesday. It also said rapid and bold reforms in the banking sector, domestic revenue collection and the energy sector are urgent for the recovery of Bangladesh’s economy.
According to the report, poverty and inequality rose in fiscal year 2026. About 2.1 million more people are living below the poverty line than a year earlier. Job creation has also stalled, and women in particular have lost jobs. In this situation the World Bank stressed making social protection programmes more effective in protecting poor and vulnerable people.
The bank said nearly half of the poorest households are currently outside any social protection programme. As a result a large share of government assistance is not reaching the truly poor. Better targeting could significantly increase the effect of the social protection system on reducing poverty.
The analysis says that if several food subsidy programmes are combined, the selection of beneficiaries for existing cash assistance programmes is made more effective and a “family card” is added, an additional 2.85 million people could be brought out of poverty. This would at the same time reduce the waste of public resources and increase the chance of assistance reaching genuine beneficiaries.
The World Bank described the implementation and expansion of the government’s Dynamic Social Registry as important in this regard. The system will make it possible to identify poor and vulnerable people on the basis of evidence and include them in social protection programmes according to need.
The report says that alongside social protection, energy and agricultural subsidies also play a role in protecting poor people. But unless those most in need of these benefits are correctly identified, it is hard to ensure the effective use of limited public resources. The bank therefore advised building a more responsive and targeted social protection system.
The World Bank also warned about Bangladesh’s overall economic situation. According to its forecast, growth in gross domestic product may remain at 3.4% in fiscal years 2026 and 2027. Falling investment, slow export growth and high inflation are keeping the economy under pressure, reducing people’s purchasing power and raising the cost of doing business.
The bank said weaknesses in the banking sector are damaging the flow of credit and investor confidence. Domestic revenue collection is also very weak: revenue equal to only 8.3% of gross domestic product was collected in fiscal year 2026, among the lowest in the world. This has limited the government’s ability to spend in necessary areas.
The picture of weakness in the banking sector is also worrying. The non-performing loan ratio rose from 30.6% in December 2025 to 33.2% in June 2026. The fiscal deficit also widened, from 3.5% of gross domestic product in fiscal year 2025 to 3.9% in fiscal year 2026.
The World Bank said there is some stability in the external sector, however. Strong remittances and rising foreign exchange reserves have kept the external sector stable. If the energy supply situation improves and the government’s reform programme gathers pace, growth could rise to 3.9% in fiscal year 2028, it forecast.
Jean Pesme, the World Bank’s division director for Bangladesh and Bhutan, said rapid reforms in the banking sector, domestic revenue collection and the energy sector are needed to avoid an economic downturn and return to inclusive growth led by private investment. He said swift implementation of these reforms is essential to protect the poor and create more and better jobs.
Alongside the targeting of social protection programmes, the World Bank’s report also stresses removing structural weaknesses in Bangladesh’s economy. In its view, making sure that assistance reaches the right people is just as important as increasing assistance for the poor.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report