The ongoing political and military conflict involving Iran, Israel, and the US has complicated global political and socio-economic conditions. Many countries heavily rely on Middle Eastern oil and face serious challenges when global supply chains are significantly disrupted.
Oil and gas are crucial raw materials for industrial operations and essential to keeping production facilities and supply chains running smoothly, supporting national and global economic progress.
Numerous countries are grappling with a significant shortage of fuel and gas. This raises an important question: Will global political and economic circumstances continue to worsen? If so, then what will happen to the countries that are fully dependent on external oil and gas resources?
Due to Covid-19, the global economy already experienced a severe recession, and regaining the economic growth lost during the pandemic has become challenging. According to scholars, Cutler and Summers, the total cost is estimated at more than $16 trillion, or roughly 90% of the United States' annual GDP, making it the largest economic loss after World War II.
The ongoing conflict between Russia and Ukraine has further exacerbated the global economy. According to the KSE Institute, since the onset of Russia's full-scale invasion, Ukraine's economic losses -- including both current and projected revenue and value added -- are estimated at $1.7 trillion and $0.6 trillion, respectively.
Despite so many challenges on this planet, the global GDP (nominal) is estimated at approximately $110-$117 trillion between 2025 and 2026.
According to the International Monetary Fund, the total GDP of emerging market and developing economies is estimated at around $51.38 trillion in current US dollars as of 2026.
Overview of Bangladesh’s economy
According to OEC World data, in 2024, Bangladesh ranked the 35th-largest economy globally, with a GDP of $450bn in current US dollars. In terms of total exports, it ranked 55th among 226 countries, while its GDP per capita placed it 148th among 193 nations.
Additionally, in the realm of economic complexity, Bangladesh was ranked 114th out of 130 economies according to the Economic Complexity Index. It also ranked 86th out of 96 in a different complexity assessment and 83rd out of 138 in yet another evaluation. The GDP value of Bangladesh represents 0.42% of the world economy.
Based on data from Bangladesh Bank and Trading Economics, Bangladesh's foreign exchange reserves rose to around $35bn in February. Reserves in Bangladesh reached an all-time peak of about $48bn in August 2021
Table: Overview of Bangladesh’s Economic Structure
Exports
According to data from OEC World, Bangladesh's top exports in 2024 included knit t-shirts, valued at $8.55bn, non-knit men's suits at $8.32bn, knit sweaters at $7.32bn, non-knit women's suits at $6.22bn, and knit women's suits at $3.34bn. The main markets for these goods were the United States, leading with $8.69bn, followed by Germany at $8.57bn, France at $4.29bn, the United Kingdom at $4.17bn, and Poland at $3.99bn.
In the most recent year, Bangladesh stood out as the world’s leading exporter of non-knit men’s shirts, totalling $2.55bn, along with jute yarn at $389 million, jute and other textile fibres valued at $146 million, and textile scraps amounting to $125 million.
Imports
In 2024, Bangladesh's primary imports, as reported by OEC World, included refined petroleum at $6.02bn, raw cotton at $2.53bn, non-retail pure cotton yarn at $1.84bn, scrap iron at $1.59bn, and synthetic filament yarn woven fabric at $1.41bn.
The main countries supplying these imports were China, leading the pack with $22.8bn, followed by India at $11.3bn, Indonesia at $3.04bn, Singapore at $2.93bn, and Malaysia at $2.59bn.
Notably, Bangladesh also ranked as the world's largest importer of various cotton and fabric items.
Current economic challenges
Bangladesh is at a critical point in its economic development, influenced by global crises and domestic reforms. The nation, heavily reliant on international trade and energy markets, has faced challenges such as geopolitical tensions, energy shortages, and economic instability. However, these issues have necessitated a strategic shift to achieve long-term economic resilience and sustainable growth.
The ongoing international crisis has exposed Bangladesh's vulnerabilities. The country relies on imports for approximately 95% of its energy needs, making it highly sensitive to fluctuations in global oil and LNG prices, leading to power outages, fuel rationing, and increased production costs.
The government has been forced to take emergency measures, including reducing electricity consumption and seeking external financial aid, to stabilize the energy sector.
These actions underscore the significant impact of global shocks on Bangladesh's domestic economy, particularly given constraints on fuel and energy use, which are closely tied to mass consumer production and the smooth operation of supply chains.
The government of Bangladesh must prioritize the stability of the overall supply chain to avoid significant macroeconomic disruptions that could further lower GDP growth, undermine socio-economic progress, and delay LDC graduation.
Current challenges, such as rising inflation, currency depreciation, and declining foreign exchange reserves, are putting substantial pressure on the micro and macroeconomy.
The Bangladeshi taka has weakened against major currencies, leading to higher import costs and increased inflation.
The primary concern for the country is that anticipated economic growth may decline further due to structural challenges, including youth unemployment and inefficiencies in the financial sector.
It is crucial to uphold macroeconomic stability amid global uncertainties, as emphasised by studies from the Centre for Policy Dialogue in Bangladesh.
Possible solutions
Although various domestic and international factors are contributing to the slowdown of economic growth in Bangladesh, our primary concern remains the nation's ability to achieve adequate economic progress.
We urge the national government and political parties to broaden their macroeconomic policies by diversifying economic sectors rather than focusing solely on specific sectors such as RMG and agriculture, or relying on remittances, mostly from the Middle East and Gulf regions, where Bangladesh exports unskilled human labour.
To tackle these challenges, Bangladesh must take prompt and strategic actions to stabilize its economy and foster long-term growth.
In the short term
The government should focus on crisis management by maintaining fiscal discipline, controlling inflation, and seeking financial support from international institutions such as the International Monetary Fund (IMF), the World Bank, and the Asian Development Bank (ADB), along with other key financial partners and foreign nations that have supported Bangladesh’s development projects over the years.
These measures indicate a shift towards more cautious and defensive economic management, aimed at mitigating immediate risks.
Beyond short-term stabilization
Bangladesh should actively pursue a broader geoeconomic realignment. The country is behind in becoming an active partner in other regional and international economic forums, such as ASEAN, and in establishing economic partnerships in the Indo-Pacific region, including Japan, Indonesia, Australia, and other Oceanian countries.
This strategic diversification aims to reduce dependence on a limited number of trade partners and enhance economic resilience in an increasingly fragmented global order.
By integrating into new regional economic frameworks, Bangladesh seeks to attract foreign investment, improve trade opportunities, and strengthen its global economic position.
Bangladesh’s long-term vision, which includes the United Nations’ Sustainable Development Goals, focuses on structural transformation, aiming to shift from a low-cost, labour-intensive economy to a high-income, industrialized nation.
Key priorities include industrial diversification, human capital development, technological advancement, and increased domestic resource mobilization.
To sustain economic growth and reduce vulnerability to external shocks, significant capital investments are essential - a reality posing a major challenge for the government.
Bangladesh is prioritizing on a limited scale resilience-building measures, which involve diversifying energy sources, investing in renewable energy, strengthening food security systems, and enhancing social safety nets. These initiatives are vital for adapting to global economic uncertainties and achieving sustainable development.
Reforms in institutions and governance are essential for achieving this strategic economic progress. The recent political changes have demystified the importance of transparency, anti-corruption initiatives, and institutional strengthening. However, some still do not believe that what has been promised is literally in place.
Addressing governance issues is essential for building investor confidence, enhancing the efficiency of the public sector, and promoting equitable economic growth.
With nearly 200 million people living in a small area and lacking significant natural resources, an abundant labour force, most of whom are unskilled, stands as the primary driver of the nation's socio-economic development in this competitive environment.
Consequently, it’s vital to attract foreign direct investment (FDI) to Bangladesh to achieve overall socio-economic progress and raise the Human Development Index. According to the UNDP’s Human Development Report, Bangladesh ranks 130th globally among 193 countries, which is not a good sign.
If the new government fails to adopt constructive human development policies and implement them effectively, social and economic challenges will persist, regardless of the initiatives undertaken.
This short article explores the impact of the global crisis on Bangladesh and recommends that the government of Bangladesh, along with various formal and informal stakeholders -- both domestic and international -- reassess its strategic responses.
This evaluation is crucial for sustaining economic progress amid ongoing global political and military conflicts and cutting-edge technological competition worldwide.
Dr ASM Anam Ullah (PhD) is an Australian academic, human rights activist, political analyst, and OHS and industrial relations expert.
