The ongoing Middle East conflict and global economic instability could push around 1.2 million additional people in Bangladesh into poverty this year, the World Bank has warned, highlighting growing risks to livelihoods and economic stability. The projection was outlined in the World Bank’s Bangladesh Development Update (April 2026), released on Wednesday, which cautions that rising inflation and declining incomes may prevent a large segment of the population from escaping poverty.
According to the report, individuals earning less than $3 per day are considered below the poverty line. Prior to the escalation of the Middle East conflict, around 1.7 million Bangladeshis were expected to move above this threshold in 2026. However, that figure is now projected to fall to about 500,000, leaving roughly 1.2 million people unable to rise out of poverty.
The World Bank noted that Bangladesh’s progress in reducing poverty has slowed in recent years. The national poverty rate increased from 18.7% in 2022 to 21.4% in 2025, with around 1.4 million people newly falling below the poverty line last year alone.
The report warns that external shocks — particularly the war in the Middle East — are compounding existing economic pressures, threatening to reverse earlier gains. The World Bank projects that Bangladesh’s gross domestic product (GDP) growth could slow to 3.9% in the 2025–26 fiscal year, as global uncertainty dampens consumption and investment.
At a briefing in Dhaka, World Bank Bangladesh and Bhutan Director Jean Pesme said weak revenue collection, rising trade barriers — including retaliatory tariffs — and persistent inflation are adding to economic strain. He stressed the need to sustain reform efforts and improve the investment climate to generate jobs and support long-term poverty reduction.
The report identifies several channels through which the conflict could impact Bangladesh’s economy. It warns of pressure on the current account balance, driven by disruptions in imports, exports and remittances, as well as exchange rate volatility. Rising global fuel prices are expected to push up transport costs, contributing to higher inflation.
At the same time, government finances may come under increased strain due to higher subsidy requirements for fuel and fertiliser. The report also highlights the risk of widening inequality, with the Gini coefficient projected to rise slightly in 2026, reflecting uneven income distribution.
Without the impact of the conflict, the World Bank estimates Bangladesh’s poverty rate could have declined to 19.3% by 2028. However, current conditions may delay that trajectory. The report underscores the importance of controlling inflation, expanding employment opportunities and strengthening the investment environment to mitigate the impact.
Experts say the coming months will be critical, as policymakers seek to balance short-term shocks with longer-term economic recovery. As global uncertainties persist, the World Bank’s warning signals a growing risk that external conflicts could translate into deeper economic hardship for millions in Bangladesh.
