As of last update in January 2022, the ongoing conflict between Israel and Hamas in Palestine has prompted Prime Minister Sheikh Hasina of Bangladesh to issue a warning about potential economic repercussions if the situation in the Middle East escalates further. Hasina briefed parliament on Wednesday regarding the government’s actions to counteract any adverse effects on the economy.
She highlighted that inflation might experience a slight increase due to global market instability, management inconsistencies, and rising fuel prices worldwide. Moreover, disruptions in the supply chain, particularly in transportation routes for exports passing through Iran or neighboring regions affected by the conflict, could lead to heightened transportation costs.
Prime Minister Hasina emphasized that exporters may encounter intensified competition due to elevated manufacturing and supply expenses resulting from the crisis. To address these challenges, all ministries and departments have been instructed to monitor developments in the Middle East closely. Preparations are underway to assess which sectors could be impacted should the conflict persist.
In response to the potential rise in shipping costs for imports caused by increases in fuel oil prices, Bangladesh aims to bolster relationships with alternative sources such as China, Morocco, Tunisia, Canada, Russia, and other nations. This strategic move seeks to mitigate the impact on shipping expenses and ensure continued access to essential imports.
In summary, Prime Minister Sheikh Hasina is proactively addressing the economic concerns stemming from the Israel-Hamas conflict by implementing measures to monitor and counteract potential disruptions to Bangladesh’s economy, including inflationary pressures and increased transportation costs.