ME conflict to affect Bangladesh’s strong remittance growth
Nearly 4.5 million Bangladeshis work in the six GCC countries - Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain and Oman - which together account for roughly 45% of total remittance inflows in FY2025–26
Anindya Arif 
Escalating tensions in the Middle East following joint US and Israeli strikes on Iran have raised concerns over Bangladesh’s heavy economic exposure to the Gulf region, particularly in remittances, energy imports and overseas employment.
Nearly 4.5 million Bangladeshis work in the six Gulf Cooperation Council (GCC) countries - Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman - which together account for roughly 45% of total remittance inflows in FY2025–26, according to official data.
Although remittance inflows remain strong, analysts caution that a prolonged conflict could disrupt labour markets, shipping routes and energy supplies, triggering broader economic consequences.
Remittances strong but risks loom
Data from the Bangladesh Bank show that remittances rose 22.4% year-on-year to $22.67 billion during July–March of FY26. February marked the third consecutive month with inflows above $3 billion, supported by Ramadan-related transfers and improved exchange rate management.
Foreign exchange reserves stood at $30.27 billion under IMF methodology as of late February, easing short-term balance-of-payments pressure.
However, economists warn that the current momentum could slow if geopolitical tensions affect employment stability in host countries.
Dr Mustafa K Mujeri, former chief economist of the Bangladesh Bank and Executive Director of the Institute for Inclusive Finance and Development (InM), said the real risk lies in indirect economic transmission channels rather than immediate remittance collapse.
“Bangladesh’s vulnerability is structural,” he noted. “If the conflict persists, higher global energy prices will widen the trade deficit, increase fiscal subsidy burdens and intensify inflationary pressure. That, in turn, could weaken macroeconomic stability and affect labour demand in host economies.”
He added that while remittance inflows are currently resilient due to exchange rate reforms and tighter controls on informal channels, external shocks could alter conditions quickly.
“A slowdown in construction or service sectors in the Gulf would directly affect Bangladeshi workers. The impact may not be immediate, but it could surface within six to twelve months.”
The blood-stained bags of schoolgirls killed in Israeli-US airstrike on Saturday last at Minab, Hormozgan Province, Iran. Photo: TRT
Energy and labour market exposure
Energy supply risks are also under scrutiny, particularly LNG shipments routed through the Strait of Hormuz, including cargoes from QatarEnergy. Disruptions could drive up import costs and place further strain on public finances.
Policy planners are reportedly considering diversification of overseas labour markets to East Asia and parts of Europe to reduce overdependence on the Gulf.
Dr Mujeri stressed that maintaining macroeconomic discipline will be crucial. “The priority should be to contain inflation, protect foreign exchange reserves and ensure targeted social protection. Strategic balance in foreign policy and prudent fiscal management will determine how well Bangladesh absorbs external shocks.”
Analysts agree that while the country faces no direct military threat, indirect economic aftershocks through energy, migration and trade could pose significant challenges if regional instability deepens.
Read More: The sunflower tourism of Raozan
A US F-15 fighter jet crashes in Kuwait
Two Bangladeshi expatriates killed and seven injured in Middle East conflict
US suspends immigrant visas for Bangladeshi citizens, effective from January 21
Airspace closures cancel 102 flights in 3 days at HSIA
More ME flights axed as misery deepens for stranded passengers
Govt to reopen closed airports before building new ones
Bangladesh in the Eyes of an Indian Traveller
Busting Myths: What It's Like to Travel Across Bangladesh
Why Bangladesh Struggles to Attract Tourists
Bandarban: The Paradise of Nature
How Political Unrest Crushed Bangladesh's Tourism & Aviation Industry
Some Heritage Sites and Monuments of Bangladesh
Nine Attractive and Scenic Places of Bangladesh
Bangladesh Resumes Visa Services in India
