The Covid-19 pandemic has resulted in an unprecedented rise in poverty in Bangladesh in a very short time span. The South Asian Network on Economic Modeling’s (SANEM) household survey in November-December 2020 indicates that the poverty rate in Bangladesh increased from 20 percent in 2019 to 42 percent by the end of 2020.
There is no denying that the decade-long success in poverty reduction in Bangladesh is under threat.
There are a few reasons behind the sudden and unprecedented rise in poverty in Bangladesh. First, the lockdown during March-May 2020 and the disruption of economic activities since the onset of Covid-19 resulted in unmatched havoc in the economy.
This havoc created a large labour market disruption as many people either lost their jobs or earned less. Although the lockdown has been discontinued since June 2020, economic activities are yet to return to normalcy.
Two rounds of SANEM’s business confidence survey of firms from major economic sectors in Bangladesh in July and October 2020 showed that the majority of the firms held the view of a slow economic recovery.