A combined hit from an import-dependent energy crisis, stagnation in industrial production, and unchecked inflation has now posed a severe challenge to Bangladesh's economic trajectory. The prolonged military conflict in the Middle East has not only heated up global markets, but its direct and indirect impacts are also beginning to reverberate across Bangladesh's agriculture, labor market, and general public living standards. The World Bank's latest assessment warns that if the crisis persists, nearly 600,000 people in Bangladesh could face an extreme risk of job loss. 1. Major Blow to Labor Market and Poverty Alleviation Bangladesh faces this global crisis at a time when its domestic economy was already under pressure due to high inflation and vulnerabilities in the banking sector. With limited new employment generation, a significant portion of the working-age population is already grappling with uncertainty.

According to World Bank estimates:

Newly Impoverished: In 2025 alone, the number of impoverished people in the country increased by an estimated 1.4 million.

Stagnation in Poverty Reduction: Had there been no war in 2026, around 1.7 million people could have escaped poverty. However, due to the war's fallout, this figure risks dropping to just 500,000. This means at least 1.2 million people are losing the opportunity to rise out of poverty. Role of Inflation: Uncontrolled price hikes of daily essentials will account for nearly 10% of the overall increase in poverty.

2. Severe Energy Crisis and Subsidy Pressures

More than half of Bangladesh's primary energy demand is met by natural gas. However, domestic gas production has declined by about 15% compared to its peak record in 2016. To bridge the gap, Bangladesh has to import 60-65% of its crude oil and 55-60% of its Liquefied Natural Gas (LNG) from the Middle East. Driven by global market volatility, five out of Petrobangla's six long-term LNG supply contracts faced 'force majeure' (unforeseen suspension). With spot market LNG prices surging to $24–$28 per MMBtu—more than double previous rates—import costs have escalated dramatically. In the 2025–26 fiscal year, total government subsidy pressures in the energy sector could reach $2.5 billion to $4.8 billion (2.8% of GDP), putting overall budgetary discipline and development spending at critical risk.

3. Multifaceted Impact on Agriculture, Healthcare, and Industry

Agricultural and Fertilizer Crisis: Around 40% of the population relies on agriculture. Due to the gas shortage, 5 out of 6 urea fertilizer factories in the country have suspended operations. Combined with a over 30% rise in urea prices on the international market, fertilizer supply for agriculture has become increasingly precarious.

Healthcare Sector and Public Health: Nearly 19,000 public health centers and over 6,200 private hospitals and clinics are forced to operate costly backup generators due to lack of uninterrupted power. Furthermore, with 90% of medical equipment and pharmaceutical raw materials being import-dependent, healthcare costs are spiraling out of control.

Industry and Labor Market: According to Professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), factors such as the suspension of new gas connections to factories, reduced working hours, and temporary or permanent factory closures are already adversely impacting the labor market.

Ultimately, the conflict in the Middle East is not merely a distant geopolitical event; it presents a direct threat to the food security, livelihoods, and health of low- and lower-middle-income people in Bangladesh. To maintain economic stability, strategic measures—such as diversifying energy sources, sustaining agricultural production, and safeguarding labor-intensive industries—must be undertaken immediately.

Author: Dr. Abul Hasnat Milton, Journalist, Political Analyst, and Editor-in-Chief, The Source News Bangla