Economic distress does not always announce itself through factory closures, unemployment queues, or empty markets. Sometimes, it reveals itself through a quieter transformation: Families continue working, shops remain open, salaries arrive on time, yet ordinary incomes no longer cover ordinary lives.
Parents reduce food purchases, postpone medical treatment, borrow from relatives, and exhaust savings to maintain familiar routines. The appearance of normality conceals a deterioration in economic security.
Bangladesh’s latest household survey offers a troubling account of this contradiction, suggesting that for millions of people, survival increasingly depends on money they have not yet earned.
According to the Bangladesh Bureau of Statistics’ Living Standard Survey 2025, 47.42% of households borrowed money to meet daily expenses during the preceding year. The proportion reached 51.91% in rural areas, compared with 40.19% in urban areas and 32.11% in city corporation areas.
These figures deserve attention not simply because borrowing is widespread, but because of its reported purpose. Loans taken to expand businesses or finance education may generate future returns. Loans taken to purchase necessities indicate that present consumption has become difficult to sustain through existing income.
The survey identifies the underlying arithmetic. Average monthly household income stands at Tk 33,513, while expenditure reaches Tk 35,311, creating a monthly deficit of Tk 1,798. This difference may appear modest when expressed as a national average, but its implications are substantial.
The annualized gap amounts to Tk 21,576 per household, assuming the monthly deficit persists. For families already operating close to subsistence, such a shortfall can consume savings, increase dependence on informal credit, and leave little capacity to absorb emergencies. The average also conceals households whose deficits are considerably larger.
More importantly, the relationship between income and expenditure has changed. In the 2022 Household Income and Expenditure Survey, average monthly household income was Tk 32,422 against expenditure of Tk 31,500. Income exceeded expenditure by Tk 922.
The latest survey reverses that relationship. Although nominal household income has risen, expenditure has increased faster, suggesting that additional earnings have not translated into greater financial security.
The figures do not establish why every household is borrowing, nor do they reveal the distribution of deficits. Nevertheless, they identify a structural warning: Rising incomes mean little when the purchasing power they represent is insufficient to sustain consumption.
This distinction challenges a common assumption in economic debate: That an increase in nominal earnings necessarily indicates improved welfare. What matters is the relationship between income, prices, and essential needs.
If wages rise by less than the cost of food, housing, transport, and healthcare, workers become poorer in practical terms without necessarily receiving smaller pay packets. Their nominal income may increase while their real choices contract.
They can continue buying necessities only by reducing quality, sacrificing other needs or borrowing. Economic insecurity thus develops not only through income loss but also through the gradual disappearance of affordable alternatives.
Bangladesh’s wage and inflation figures reinforce this interpretation. Government data indicate that inflation exceeded wage growth for 56 consecutive months through September 2026. Meanwhile, annual wage growth slowed from 8.05% in August to 7.9% in September. These figures suggest that workers have endured a prolonged erosion of purchasing power.
However, the national averages should be interpreted carefully: Households differ in their employment, earnings, and consumption patterns, while inflation affects expenditure categories unevenly. Lower-income families are particularly vulnerable because food and other necessities absorb a larger share of their budgets, leaving less room to adjust when prices rise.
The consequences become clearer when regional differences are examined. Average monthly household expenditure is Tk 46,778 in city corporation areas, Tk 37,344 in other urban areas, and Tk 32,532 in rural areas. Yet rural households report the highest incidence of borrowing.
This apparent contradiction disappears once expenditure levels are distinguished from economic capacity. Urban households may spend more because housing, transportation, and services are expensive. Rural households may spend less because their incomes are lower and their consumption is already constrained.
Lower expenditure, therefore, cannot automatically be interpreted as greater affordability. It may instead reflect deprivation that household averages fail to capture.
The composition of expenditure also matters. Rural families devote relatively more of their budgets to food, while non-food items account for 56.7% of household expenditure in city corporation areas.
These patterns expose different dimensions of vulnerability. When food prices rise, rural households have limited scope to reduce an already essential expense. Urban families face pressure from rent, transport, education, and healthcare, costs that are often difficult to avoid.
Consequently, identical inflation rates can produce unequal hardships. Effective economic policy must account for these differences rather than treating households as interchangeable units in a national average.
Rural indebtedness also reflects differences in employment opportunities and income stability. Agricultural earnings can be seasonal, while informal employment frequently provides neither predictable wages nor protection against illness and unemployment.
Remittances support many communities, but their benefits do not reach every household. Families without stable employment, migrant earners, or adequate savings may have few alternatives when essential expenses exceed income.
Borrowing bridges the immediate gap without correcting its cause. If the next month’s earnings remain insufficient, repayment becomes another expense competing with food, healthcare, and education. What begins as temporary assistance can become a recurring mechanism for financing poverty.
This is why the distinction between productive and distress borrowing is essential. Credit can help households acquire assets, establish businesses, and improve their future earning capacity.
Borrowing for consumption is not necessarily harmful when it addresses a temporary disruption and repayment is affordable. The danger arises when loans repeatedly finance unavoidable expenditure without a credible prospect of higher income.
In such circumstances, debt does not smooth consumption across time; it transfers deprivation into the future. Interest payments may then deepen the original shortfall, while the absence of savings makes households increasingly vulnerable to economic shocks.
The wider economic environment compounds this pressure. The World Bank’s Bangladesh Development Update, released on October 6, warned that prolonged economic weakness, inadequate labour demand and persistent inflation were undermining living standards.
It projected that the national poverty rate could rise from 18.7% in 2022 to 22.5% in 2026. This is a projection, not a confirmed outcome, but it signals a serious risk.
The energy crisis adds another constraint by increasing production difficulties, reducing operating hours and discouraging recruitment. When businesses cannot expand employment, households lose opportunities to compensate for rising prices through additional earnings.
These pressures reveal a limitation in judging economic performance primarily through aggregate growth. Growth can coexist with declining household security when its benefits are unevenly distributed, employment creation is inadequate or real wages stagnate.
The survey alone cannot establish the precise contribution of each factor, but its findings, considered alongside wage and inflation data, suggest that economic recovery cannot be assessed solely by the movement of headline indicators. The decisive question is whether growth generates reliable incomes and whether those incomes preserve people’s ability to meet essential needs without sacrificing their future.
The human consequences extend beyond material deprivation. Financial insecurity forces families to make decisions that rarely appear in economic statistics. A parent may postpone a child’s education, an elderly person may delay treatment, or a worker may continue an exhausting job because losing even one month’s income would be disastrous.
Such compromises gradually diminish opportunity and dignity. Children growing up in financially strained households may inherit disadvantages through poorer nutrition, interrupted education, and reduced access to healthcare. Household debt can therefore transmit present economic weakness into future inequality, making recovery more difficult across generations.
The government must respond with a combination of immediate protection and structural reform. Controlling inflation requires credible macroeconomic management, stronger competition in essential commodity markets and action against practices that unnecessarily increase prices.
Employment policy must encourage productive investment, reliable energy supply, and the creation of decent-paying jobs. Wage adjustments should reflect actual living costs, particularly for vulnerable workers, while targeted social assistance should protect households unable to absorb further shocks.
Better income and expenditure data would also help identify which groups face the largest deficits and whether interventions improve their circumstances.
The Ninth National Pay Scale provides one immediate policy context because the National Pay Commission commissioned the BBS survey to inform its recommendations. Public employees’ purchasing power deserves consideration, but cannot resolve a wider crisis affecting private-sector workers, informal labourers, and rural households.
Poorly calibrated increases could also create additional fiscal pressures without addressing the causes of inflation. The challenge is to protect workers’ real incomes while strengthening productivity, employment, and price stability. A credible response must recognize that household welfare depends on both what people earn and what their earnings can actually buy.
Ultimately, the most revealing measure of economic progress is not simply how much money enters a household, but whether that money provides security. When nearly half of households report borrowing for daily expenses, the issue extends beyond individual financial management.
It raises questions about wages, employment, prices, and the distribution of economic opportunity. Debt used to build a future can represent investment; debt repeatedly used to purchase necessities signals that the present is becoming unaffordable.
Bangladesh must confront this distinction before borrowing becomes an ordinary condition of family life, and financial insecurity becomes an inherited feature of poverty.
HM Nazmul Alam is an academic, journalist, and political analyst based in Dhaka, Bangladesh. Currently he teaches at IUBAT.
