Triple economic blow looms from MidEast war
Bangladesh faces the risk of a fresh economic squeeze if the Middle East conflict drags on, with declining remittances, soaring energy import costs, currency depreciation and rising inflation potentially putting further pressure on an already vulnerable economy, Fitch Ratings has warned.
The global credit-rating agency said the country’s heavy dependence on the Middle
East for energy supplies and migrant workers, coupled with its limited capacity to absorb prolonged external shocks, made it particularly vulnerable to an extended conflict.
A $10-per-barrel increase in global oil prices alone could raise Bangladesh’s annual oil import bill by $1.2 billion, equivalent to around 0.2 per cent of gross domestic product (GDP), Fitch estimated in its latest assessment released on Thursday.
The agency noted that remittances were another major source of vulnerability, as Gulf countries accounted for nearly half of Bangladesh’s total remittance inflows in 2025-26.
Although remittance earnings have remained resilient so far, a prolonged conflict could disrupt the flow of money if migrant workers are forced to return home from the Middle East.
“Although remittances have held up well, we see a risk that in case of a prolonged conflict, they could decline on account of workers returning from the Middle East,” Fitch said.
“Lower remittances could markedly weaken the external liquidity position,” it added.
Crude oil accounts for nearly 15 per cent of Bangladesh’s total imports, leaving the economy exposed to sustained increases in international prices.
The risks also extend to the country’s electricity and gas supply. Nearly 40 per cent of Bangladesh’s electricity generation comes from liquefied natural gas (LNG), while Qatar supplies around 70 per cent of its LNG imports, creating significant exposure to prolonged supply disruptions.
Fitch warned that higher energy costs could widen external imbalances, weaken the taka and fuel inflation, while shortages of energy supplies could undermine economic growth.
The warning comes amid persistent inflationary pressure and a slowdown in economic activity. Inflation averaged 8.8 per cent in the first nine months of 2026, while GDP growth fell to 2.2 per cent year on year in the first quarter before recovering to 4.6 per cent in the second quarter.
A prolonged period of elevated energy prices could also compel the government to maintain subsidies for LNG and electricity, adding to fiscal pressures at a time when the economy remains exposed to external uncertainties.
