Dhaka, April 8 -- Bangladesh's economy faces significant challenges with slowing growth and rising poverty for three consecutive years, persistent inflation, stressed banking sector, weak revenue mobilization, and subdued private investment, which is further compounded by the headwinds from the conflict in the Middle East, says the World Bank in its new update, released today.

The latest Bangladesh Development Update projects growth to slow to 3.9 per cent in FY26.

A protracted conflict in the Middle East could have significant implications for Bangladesh, including higher inflation, reduced fiscal space from rising energy subsidies, and a weaker current account due to higher import costs, weaker exports, and lower remittances.

With th...