The ongoing war involving the United States, Israel, and Iran has unsettled the entire world. As a result of the war, Bangladesh is not only facing energy-related challenges but is also beginning to experience impacts on remittance inflows.
In particular, remittances from Bahrain, Jordan, and Iraq are showing a clear downward trend, which has raised concerns among analysts. This is significant because remittances from expatriates are one of the main driving forces of Bangladesh's economy.
According to the latest data from Bangladesh Bank, remittances from Bahrain in February 2026 stood at $50 million, down from $60 million in July 2025 at the start of the current fiscal year. Similarly, remittances from Jordan were $15 million in February, compared to $16 million in July. From Iraq, remittances declined to $3.7 million, down from $5.2 million in July. Although the decline from these three countries may seem small, its economic significance is substantial. The concern is that the downturn, driven by political and economic uncertainty as well as regional tensions in these countries, could spread to other nations, putting Bangladesh in a difficult position.
However, while remittances from these three countries have declined, inflows from major labor markets in the Middle East have increased during the same period. In February 2026, remittances from Saudi Arabia reached $490 million, up from $430 million in July of the previous year.
Remittances from the United Arab Emirates were $370 million in February, compared to $280 million in July. From Oman, remittances rose to $180 million from $140 million; from Kuwait, to $150 million from $130 million; and from Qatar, to $120 million from $110 million over the same period.
This trend indicates that while employment remains relatively stable in larger and more stable economies, smaller or more vulnerable labor markets are already being affected.
According to analysts, the war situation has created uncertainty among expatriates. Many, worried about the future, are sending money home more quickly. However, this trend may not be sustainable in the long run.
If regional instability persists, it could negatively affect employment and income, increasing the risk of an overall decline in remittance inflows. Since a large portion of Bangladesh's remittance income depends on a few Middle Eastern countries, it is crucial to monitor the situation closely.
The head of the treasury division of a private bank stated that remittance inflows to Bangladesh have been very strong in recent months, much higher than before. A major reason behind this increase was Eid-ul-Fitr. However, such high growth is unlikely to last long. If Bangladeshis begin losing jobs in Middle Eastern countries, the impact could be severe. He added that it is already becoming difficult to maintain remittance inflows, as it is not possible to send workers abroad as easily as before, and even exchange houses are not functioning properly everywhere. If this disruption continues, remittance inflows will inevitably decline.
Executive Director and Spokesperson of Bangladesh Bank Arif Hossain Khan said that every year during Eid-ul-Fitr, expatriates send additional money to support their families, which is why remittance inflows were particularly high in March. He noted that many expatriates who previously kept savings in local banks in Middle Eastern countries are no longer doing so due to the ongoing war and uncertainty. Instead, they are sending almost all their available funds back home, which has temporarily boosted remittance inflows significantly.
Former Lead Economist of the World Bank's Dhaka office, Dr. Zahid Hossain, said that ongoing bombings in several Middle Eastern countries could lead to job losses for Bangladeshis in the near future. If remittance houses in countries like Saudi Arabia and the UAE fail to operate properly, even those willing to send money may not be able to do so. However, he described this as a temporary issue. If the war ends, the situation could improve. To address potential declines in remittance inflows, Bangladesh must focus on exporting skilled labor to international markets, which requires improvements in the education system.
It is worth noting that nearly 45% of Bangladesh's total remittances come from Middle Eastern countries. In March, remittance inflows reached a new record high, totaling $3.75 billion, which played a significant role in boosting foreign exchange reserves. As a result, the country's reserves have strengthened again, currently standing at $34.43 billion.
