Middle East tensions may slow remittance inflows: BB

Remittance inflows could slow due to migration disruptions and economic uncertainty in the Middle East amid the US-Israel war on Iran, according to a Bangladesh Bank (BB) quarterly report on remittance published Monday.

The escalating war in the Gulf region has already pushed up the prices of oil, liquefied natural gas, fertiliser, and sulphur, as Iran effectively controls the Strait of Hormuz-- through which one-fifth of global oil exports and nearly one-third of global fertiliser shipments pass.

The crisis has forced the cancellation of more than 600 Middle East-bound flights from Bangladesh, mostly affecting migrant workers.

Since fiscal year 2014-15, 8.6 million migrants have found jobs abroad, with Saudi Arabia employing 48 percent of them. Overall, Middle Eastern nations -- including Saudi Arabia, Oman, Qatar, the UAE, and Kuwait -- accounted for 75 percent of all overseas employment, according to the Bangladesh Economic Review 2025.

The region contributed nearly half of the more than $30 billion in remittance Bangladesh received in FY26.

The BB report for October-December said remittance earnings are expected to remain relatively resilient.

“However, smooth inflows of remittance would depend on easing geopolitical tensions. Despite high remittance inflows with a large stock of existing migrant workers, remittance growth could slow due to migration disruptions and economic uncertainty in host countries,” it said.

“The magnitude of the impact will largely depend on the duration and geographic spread of the US-Iran conflict. A brief conflict may have only limited effects, whereas a prolonged regional crisis could significantly reduce remittance inflows and intensify pressure on the external sector of Bangladesh.”

Remittance inflows grew 20 percent year-on-year to $8.67 billion in the October-December period of FY26, reflecting growing confidence among the Bangladeshi diaspora in banking channels.

The BB said the surge also showed that policy measures contributed to higher remittance inflows.

The highest volume of remittances came from Saudi Arabia, accounting for 15 percent of total inflows, followed by the United Arab Emirates, which accounted for 13.54 percent.

During October-December of FY26, a total of 293,474 migrant workers, including 18,225 women, migrated from Bangladesh. Of the total, Saudi Arabia accounted for 64 percent, followed by Qatar (9.21 percent), Singapore (6 percent), and Kuwait (3 percent).

The BB said remittance inflows play a crucial role in supporting foreign exchange reserves, strengthening macroeconomic stability, easing external sector pressure, and enhancing overall economic resilience.

It noted that the contribution of remittance to gross domestic product (GDP) has been increasing, reaching its peak in FY25.

This higher inflow of remittances led to an estimated remittance-to-nominal GDP ratio of 7.66 percent in the second quarter of FY26.

In addition, remittances’ share relative to exports and imports showed significant improvement during the same period.