A prolonged surge in global energy prices triggered by the ongoing conflict in the Middle East could significantly weaken Bangladesh’s economic outlook in FY2026-27, with finance officials warning of slower economic growth, higher inflation and mounting pressure on the country’s external and fiscal balances.
According to official assessments prepared ahead of the national budget, a sustained increase in oil prices could reduce Bangladesh’s GDP growth to around 4.5 percent in FY27, well below the baseline projection of 6.5 percent.
Although the economy is expected to recover gradually in subsequent years, officials believe it may fail to return to its original growth trajectory.
The report warns that if international oil prices rise by an additional 30 percent during FY27, inflation could climb to 9.1 percent, compared with the baseline forecast of 7.5 percent, disrupting the government’s efforts to bring down price pressures.
The higher energy costs are also expected to weigh heavily on key productive sectors. Industrial growth could decline from a projected 7.0 percent to 4.5 percent, while agricultural growth may slow from 4.5 percent to 3.0 percent, reflecting rising production and transportation costs.
