Iran war disruptions spark higher costs and lost income in Bangladesh

DHAKA, Bangladesh (AP) — After a setback in his clothing business about a year and a half ago, Tariq Islam lost his savings and started sharing his motorcycle to make ends meet. Until recently he was working for hours on fuel lines. supply disruptions linked war in Iran surge into Bangladesh.

The 53-year-old father of four fears the hardship will worsen if the war drags on, saying long hours of waiting for fuel have sharply reduced his income and made it increasingly difficult to support his family, who have a daughter at university and a son at university in the country’s capital, Dhaka.

“My family was getting by pretty well through carpooling,” he said. “But after the fuel shortage started, I would buy fuel for one day and run the bike for two days. As a result, I had to sit idle for a day, which reduced my income.”

The tensions in Islam’s home reflect a broader crunch in Bangladesh, which is heavily reliant on imported fuel, where energy shortages have disrupted daily life, slowed industrial production and raised concerns about economic growth at a time when global tensions are driving up costs and straining supply.

Conditions have eased a bit in recent days and queues at gas stations have become shorter. state Supply has increased, but concerns remain across sectors.

Governments across Asia face similar species The war-related increase in energy prices is shaking economies dependent on imported oil and natural gas.

Continent exposed Because it is dependent on imported fuel and most of it passes through Türkiye. Strait of Hormuz – approximately a crossing point one fifth of global oil and gas trade.

Higher fuel costs are leading to inflation and squeezing household budgets; Many sectors, from manufacturing to transportation, face increasing operating costs and supply disruptions.

The Asian Development Bank lowered its growth forecasts for developing Asia and the Pacific in late April, warning that war-related energy outages would slow economies and increase inflation. A growth of 4.7% is expected in 2026, with inflation rising to 5.2% as oil prices increase and financial conditions tighten.

Many hope for a quick end to the conflict and a return to normal.

Fighting father Islam said, “If this situation continues, we will have to return to our village and find another way to make a living.” “It is not possible for us to survive in Dhaka by carpooling under these conditions.”

Energy crisis burdens Bangladesh economy

Rising energy prices are also expected to strain Bangladesh’s finances; The government is expected to spend an additional $1.07 billion on energy. LNG If global prices remain high, subsidies will only be available in the April-June quarter.

Bangladesh sought supplies from its larger neighbor India, which responded positively due to its diverse fuel sources, including Russia.

Global lenders have warned that growth will slow in the country of more than 170 million people, while authorities have already introduced austerity measures to manage the crisis. Gas and diesel shortages have triggered more frequent power outages in industrial areas.

The government also shut down fertilizer Factories will direct gas to power plants, evening hours will be restricted in shopping malls and fuel will be rationed.

The World Bank said in April that it expected growth in Bangladesh to slow to 3.9% in the fiscal year ending June 2026, warning that the protracted Middle East conflict could increase inflation, widen the current account deficit and strain public finances through higher energy subsidies.

Jean Pesme, World Bank division director for Bangladesh and Bhutan, said the economy was already facing “pre-existing vulnerabilities and challenges, especially on the economic and employment front.”

Rising costs are now “clearly making the financial situation even more difficult.”

He also warned that authorities should be careful when increasing fuel prices, saying high costs could harm farmers and agriculture.

Bangladesh ready-made garment industry affected by slowdown in exports

The energy crisis is also driving up costs and threatening Bangladesh’s garment exports, the backbone of its economy, business leaders say.

Bangladesh Chamber of Industry President Anwar-Ul Alam Chowdhury said exports to Europe and the USA may face a significant decline. Shipments have fallen between 5% and 13% in recent months, he said. He worries that customers may lose confidence in Bangladesh’s delivery ability and that rival countries such as India, Vietnam and Cambodia could gain market share if the crisis continues.

Chowdhury said factory production has fallen by 30% to 40% for various reasons, the situation has worsened since the US and Israel started the war against Iran, while operating costs have increased by about 35% to 40%.

Bangladesh, the world’s second largest ready-made garment exporter after China, earns approximately $39 billion annually from the sector, which employs approximately 4 million workers, mostly women from rural areas.

Alvi Islam, director of Arrival Fashion Limited, said manufacturers are facing higher costs for petroleum-based materials such as sewing threads, polythene bags (plastic bags used in packaging) and cartons, and are spending more on diesel generators to cope with frequent power outages.

His company, which exports products worth approximately $40 million a year, now runs a generator for at least four hours a day during production.

“Therefore, the cost of doing business for ready-made clothing exports has increased significantly in the last month,” he said.

Workers are having trouble making ends meet

35-year-old garment worker Mosammet Runa said he feared for his family’s future if the war continued.

“Millions of people like us depend on this industry. This is how we survive,” said Runa, who earns about $400 a month with her husband to support their family of six.

He said a protracted conflict could destroy jobs and called for an end to the conflict.

“We are innocent people. The world should not victimize us,” he said.

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AP journalist Al Emrun Garjon contributed to this report.