The husband works as a marketing executive with a mobile network operator; the wife works as a retail credit officer in a commercial bank. They rent a 1,450 square feet flat in Mirpur. They have two children going to an English-medium school.
The children take extracurricular lessons with a self-learning program in the afternoon. The grandparents who have now retired stay with the family to take care of the children. The helping hand cooks and cleans the house. The husband and wife and children all watch Netflix in the evening. Sometimes, on the weekend, they go and watch a movie. The children love burgers. The family saves for a vacation to visit Cox's Bazar in the winter. They also want to go to Bangkok and Phuket for a few days. They have long been planning for it since their marriage.
Then, think about a family in Gazipur.
The couple works in a ready-made garments (RMG) factory in Ashulia. They live in a two-bedroom apartment in Tongi. They commute to work on their office bus. They have two children who go to a nearby school. After school, they spend time in a day care. On returning home, the husband goes to the kitchen market, the wife cooks the meal for the evening, and for the next morning. When the husband arrives and the meal is served, the family talks about their plans to build a small house in their village. Vacation means a visit to the village home, a dip in the pond, and chit-chat on the tea stall.
One of these households earns several times what the other earns. But that shows the width and breadth of the middle class. And both of these households are one shock away from slipping down.
That is the range this column is about.
According to the Consumers Association of Bangladesh, 57% of Dhaka tenants spent half their income on rent in 2025, and 12% of tenants spent three-quarters. Rents increased by 400% in 25 years, faster than the price of essentials.
Households spent 45.8% of their consumption on food in 2022. The cost of beef increased from Tk 275 a kilogram in 2014 to Tk 750 by September 2025.
Out-of-pocket health expenditure in Bangladesh is among the highest in the world, at 79.3% of current health expenditure on WHO's 2023 data. The Bangladesh Institute of Development Studies calculates that medical bills pushed 6.1 million people below the poverty line in 2022.
Almost nobody is insured against that risk. An analysis of the 2022 Demographic and Health Survey found coverage of 0.3% among women aged 15-49.
According to Unesco, two-thirds of the cost of children's education is borne by families. That is the fourth-highest household burden in the world. Out-of-pocket cost per secondary student rose from Tk 20,712 to Tk 27,340 in the year to 2022, driven by tutoring and guidebooks.
Transportation costs have been on the rise. A rickshaw ride for merely a kilometre now costs Tk 30. The price of diesel rose from Tk 100 to Tk 115 a litre in April, and bus fares followed within a week.
Prices have outpaced wages for 53 straight months, every month since January 2022. The PPRC survey of May 2025 found the middle 40% of households earning Tk 29,277 a month and spending Tk 29,826. Urban households earned Tk 40,578 and spent Tk 44,961. The middle class is thus dissaving to stand still.
What happens when buying power diminishes?
The family in Mirpur gives up Phuket first, then the mall, then the car. Private car registrations fell to 9,387 in 2025, the lowest since 2011. Motorcycle sales hit a six-year low in 2024, below even the pandemic year.
Walton's air-conditioner sales fell 32% in its 2025 financial year and televisions 21%. Net sales of savings certificates were negative Tk 21,124 crore in FY24 and negative Tk 6,063 crore in FY25.
Households cashed out faster than they put in. Credit card spending rose 33% in the year to May 2026. A middle class which borrows to buy groceries is not a viable market that can be served.
There is another challenge for the middle class -- it does not have avenues to invest.
The Dhaka Stock Exchange index sits around 5,911, still a fifth below its October 2021 peak. Beneficiary owner accounts fell from 31.53 lakh in 2016 to 16.75 lakh by mid-2026.
Under 1% of Bangladeshis hold a share account. In India, 9% do. Market capitalization was 33.6% of GDP in 2015 and 19.5% in 2024. Vietnam's rose from 24.6% to 43.0%. We went backwards while they doubled.
Thirteen multinationals are listed on the Dhaka Stock Exchange, and none has listed since Robi in December 2020.
The corporate bond market is Tk 3,334 crore, or six hundredths of 1% of GDP. A modest Dhaka flat cost seven to ten years of income in the early 2000s. It now costs twenty-five to thirty. Bangladesh Bank requires a 30% down payment, and most private banks charge 12% to 14.5% in interest.
So the money goes into sanchayapatra at 11.83%, or a deposit pension scheme at seven. From July 1, 2026, sanchayapatra profit moved into marginal slab rates. A saver in the 30% bracket now nets about 8.3% against 9.16% inflation.
Retirement is the clearest verdict of all. The Universal Pension Scheme opened in August 2023 with an ambition of 10 crore citizens. By June 2026 it had 378,280 registrations. It added 240 people in January 2026 and 148 in February.
This is what I want to draw your attention to. A middle class that cannot spend, save, or invest does not only fail itself. It caps every firm above it.
Bangladesh has 11.7 million economic units. Medium enterprises are 0.31% of them and large firms 0.08%. The missing middle is not a metaphor. It is 99.6% of the register.
The CMSME share of bank credit fell from 19.14% in December 2022 to 16.76% in December 2025, against a 25% target that has now been pushed out to 2029.
The domestic market incentivizes firms to move up the value chain for higher value products. But the country's RMG sector is designed solely to serve the low tier of the global export market.
Five basic items make up 78% of our garment exports, and about 95% of factories make only those five. While in recent years, some manufacturers have launched their own brands to serve the local market, Bangladesh's investment pitch centres on the premise of cheap labour -- produce in Bangladesh, sell abroad.
The value is created here and captured elsewhere. This explains why the global giants do not invest in Bangladesh.
We have a large market, but per capita consumption is poor. Our households spend $330 billion a year against Vietnam's $274 billion, so the market is bigger in total. But ours is spread across 176 million people at $1,876 each, where Vietnam's is spread across 102 million at $2,696.
The investors have noticed. JETRO counted 172 Japanese-affiliated companies here in its 2025 survey, down from 214 three years earlier, while Vietnam holds 2,008.
Indonesia shows the other path. A middle class that is a fifth of the population generates 43% of household consumption, which is why Coca-Cola committed $500 million there in 2015.
How do we turn this around?
I propose five measures.
First, enforce the tenancy rules we already have. Dhaka North issued guidelines in January 2026 capping annual rent rises at 15% and creating ward-level dispute committees. Staff them and extend them citywide. Rent is the largest and least governed line in a middle-class budget.
Second, build a contributory national health insurance scheme, starting with salaried formal employees. Fund it by shifting part of the health budget from facility subsidy to demand-side purchasing.
Third, restore the investment rebate and index the tax-free income threshold to inflation. A savings instrument that loses to inflation after tax is a transfer from savers to the treasury.
Fourth, create avenues to invest. Lift the 30% cap on IPO proceeds used for debt repayment. List profitable state enterprises. Build a corporate bond market. We cannot ask households to save and then offer them only a savings certificate.
Fifth, support retirement policies. Make enrolment in Progoti automatic. Three years of voluntary sign-up have produced only 378,280 members, and if every formal employer were required to enrol its staff by default, with individuals left free to opt out, that number would change within a year.
One final suggestion. The government should cut the tariffs on intermediate goods, which average 18.8% and reach 29% with para-tariffs. We tax the inputs our manufacturers need to make anything better than a t-shirt.
The garment industry gave Bangladesh its first transformation. It will not give us the second. That one has to be bought by our own consumers. Right now they are spending all of their savings on rent, medicine, and school fees.
Md Rubaiyath Sarwar is Managing Director, Innovision Consulting.