: Sunday, 05 April 2026 5:49 PM
New Delhi. The impact of the Iran conflict is also visible on the economy of Bangladesh. According to a report in The Daily Star, pressure on important sectors like fuel, fertiliser, freight and foreign exchange is increasing. Even though Bangladesh is geographically far from the conflict zone, its impact is increasingly felt due to its deep integration with the global economy. The biggest cause of this disruption is the Strait of Hormuz, through which about one-fifth of the world’s oil and LNG passes. Any disruption in this route affects energy supplies, shipping and the availability of fertilizers, which are vital for agriculture.
Its effect is beginning to be seen in the global market. Crude oil prices have crossed $100 per barrel, LNG supplies are being delayed and freight costs are rising. There is also a surge in the prices of fertilizers, which is threatening food production.
All these shocks are coming together for Bangladesh. Rising energy costs are driving up electricity and transportation prices, while expensive fertilizers are pushing up farming costs. Along with this, import cost is also increasing due to cost of freight transportation. The report says that the problem is not just the increase in prices, but the availability of these essential commodities is also becoming a matter of concern.
Any shortage in fuel, fertilizer or shipping could hurt the economy even more than prices. Imports becoming costlier could also put pressure on exports and migrant income (remittances), especially if the Gulf countries’ labor markets weaken.
Financial pressure on the government is also increasing. To ensure that the full impact of global fuel prices does not reach the public, subsidies are being given, which is increasing the burden on the government exchequer. At the same time, due to weak tax collection, the scope for providing additional relief has been limited.
Rising energy and fertilizer costs are impacting transportation and food prices, creating “cost-push” inflation. In such a situation, it becomes difficult to control inflation through monetary policy alone and the government has to strike a balance between inflation and economic growth.
According to the report, it may also affect the financial sector. If economic activity slows, there could be further pressure on an already weak banking system, posing new challenges to macroeconomic stability.
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