Prolonged Middle East Conflict Could Hit Bangladesh Remittances, Warns Fitch

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Global credit rating agency Fitch Ratings has warned that a prolonged Middle East conflict could reduce Bangladesh’s remittance inflows as migrant workers return home, weakening the country’s external liquidity position.

In a revised assessment published on October 29, Fitch said Bangladesh’s exposure to the conflict is significant because remittances accounted for 36 per cent of current external receipts in the fiscal year 2024–25. Remittances from Gulf countries made up nearly 46 per cent of Bangladesh’s total remittance inflows in 2025, according to the agency.

“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.”

The agency also cautioned that a prolonged energy shock could increase pressure on the country’s external balances by raising import costs. Crude oil accounts for nearly 15 per cent of Bangladesh’s total imports. According to Fitch’s estimates, a $10-per-barrel increase in oil prices could raise Bangladesh’s annual oil-related import bill by $1.2 billion, equivalent to 0.2 per cent of gross domestic product.

Fitch noted that continued support from bilateral and multilateral sources could help ease liquidity pressures. The agency had revised the outlook on Bangladesh’s long-term foreign-currency issuer default rating to negative from stable in May 2026, citing rising external and economic vulnerabilities linked to the Middle East conflict and limited progress on key reforms.