Instability in the Middle East is starting to impact Bangladesh’s exports, according to Commerce Minister Khandakar Abdul Muktadir. He cautioned that an extended crisis could strain remittance inflows. The ongoing turmoil has led to higher fuel prices, increased import expenses, and elevated shipping and insurance costs. This situation is hindering exports to Middle Eastern markets, contributing to inflationary pressures and potentially affecting remittance inflows. Minister Muktadir highlighted concerns about the broader economic and trade implications of the US-Israel conflict with Iran, emphasizing that Bangladesh is not immune to these global repercussions.
The minister emphasized the significance of the Middle East as a key trading partner for Bangladesh, importing various goods such as garments, pharmaceuticals, frozen foods, and leather products. While exports are already under pressure, a prolonged crisis could further impact remittances in the coming months. The government, under the Prime Minister’s directives, is actively monitoring developments and has outlined measures to mitigate the situation. These include initiatives to lower logistics costs and diversify export markets beyond the affected regions.
Regarding trade within the South Asian Association for Regional Cooperation (SAARC), Minister Muktadir noted that Bangladesh experiences trade deficits with India, Afghanistan, Bhutan, and Pakistan, while maintaining surpluses with Nepal, Sri Lanka, and the Maldives. Notably, trade with Afghanistan and Bhutan showed deficits, with exports falling short of imports. Meanwhile, trade imbalances with India and Pakistan were more pronounced, resulting in significant deficits for Bangladesh.
In contrast, Bangladesh recorded trade surpluses with Nepal, Sri Lanka, and the Maldives, with exports surpassing imports. The country’s trade dynamics with SAARC members present a mixed picture of deficits and surpluses, highlighting the need for strategic trade management. Responding to inquiries, the commerce minister also provided export earnings data over the past five fiscal years, showcasing fluctuations in export income. Export earnings saw fluctuations over the years, reaching a peak in FY 2021-22 before experiencing some declines and ultimately rebounding in FY 2024-25.
