Middle East conflict begins to impact Bangladesh economy: Experts

Experts and economists warned that the ongoing conflict in the Middle East is beginning to impact Bangladesh’s economy, with experts warning of immediate and long-term risks to energy supply, export markets, and migrant worker remittances. 

The warning came on Sunday from a seminar on the impact of the Iran war on several sectors of the economy and livelihood arranged jointly by the Voice for Reforms and Policy Exchange Bangladesh (PEB) at the BDBL building in the capital.

M. Mashrur Reaz, Chairman and CEO of PEB, stated that the ongoing conflict has triggered energy disruptions due to crude oil and LNG supply shortages, coupled with rising global prices.

These disruptions are impacting electricity generation, transportation, and industrial production, posing risks to food security, labor mobility, and overall industrial productivity, he added.

“Exports are being delayed due to shipping disruptions and higher freight costs, while rising costs of petroleum-based raw materials increase production expenses for Bangladesh’s apparel sector, risking order losses and weakening foreign exchange inflows,” said Mashrur Reaz.

He also said that overseas migration and remittances are also affected as work restrictions and operational disruptions in GCC countries reduce remittance flows, which are critical for macroeconomic stability. 

Energy shocks have immediate effects, export impacts are unfolding, and remittance effects may be longer-term but highly significant for Bangladesh’s economy, the economist said.

A K M Fahim Mashrur, Co-coordinator of Voice for Reform, said that Bangladesh’s foreign exchange reserves are under pressure from rising energy costs and potential declines in remittances. 

He warned that with higher oil and gas prices worth $5.0 billion and an estimated $5–6 billion annual shortfall of remittance, reserves could fall significantly by the end of 2026. 

While he noted that there is no immediate crisis, he emphasized that these trends could trigger macroeconomic imbalances, making close monitoring essential.

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