Middle East tensions may disrupt food supply chains: BB

Rising geopolitical tensions involving Iran, Israel and the
United States have already disrupted global energy and food supply chains, and
may put additional pressure on Bangladesh's external balance and domestic
inflation, according to Bangladesh Bank.
In its Quarterly Report for
October-December, published today (8 April), the central bank said the newly
elected government, which took office at the end of February, has taken steps
to mitigate external vulnerabilities.
These include efforts to diversify
crude oil import sources and reduce reliance on the Middle East, it added.
The central bank also said Bangladesh's external sector
showed improvement in the second quarter of FY26, driven largely by a surge in
workers' remittances. "The current account posted a surplus of $476
million, reversing a deficit of $818 million in the previous quarter."
However, the report mentioned that
export performance weakened, particularly in the ready-made garments sector,
amid cautious demand in major markets and rising global trade tensions.
At the same time, import payments
remained broadly contained amid subdued domestic demand and moderate investment
activity, resulting in a slight widening of the trade deficit, it said.
According to the central bank, the
financial account recorded a surplus of $329 million, supported by higher
foreign direct investment and increased disbursements of medium- and long-term
external financing.
Overall, the balance of payments registered a surplus of $1.09 billion, helping
boost gross foreign exchange reserves to $33.19 billion ($28.58 billion under
BPM6) by the end of December 2025. The exchange rate remained stable under the
market-based framework.
The report said inflationary
pressures persisted during the quarter. Point-to-point headline inflation rose
to 8.49% in December 2025 from 8.36% in September 2025, partly due to higher
administered fuel prices.
Food inflation edged up to 7.71%,
driven by increased prices of fish, dried fish and fruits. Non-food inflation
also rose to 9.13%, reflecting higher energy-related costs, including gasoil.
Despite steady nominal wage growth, elevated inflation kept real wages in
negative territory, eroding purchasing power, the central bank said.
In the real sector, economic performance
was mixed. Agricultural output exceeded both targets and last year's levels,
supported by favourable weather and continued policy support.
However, industrial growth slowed
sharply to 1.27% during the quarter, down from 6.82% in the previous quarter,
it said, adding that the services sector remained resilient, helping sustain
overall economic stability.
















