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Impact of Ukraine war on Bangladesh economy

May 27, 2023 00:00:00

Bangladesh is feeling the impact of the Russia-Ukraine war in various ways. The situation is expected to worsen further if the war lingers. Reduced exports and increased import bills are hitting the country hard, particularly as an oil-importing nation, we already facing high import payments. In addition to fuel prices, costs of other imported products have also gone up significantly. This will push the production costs up, resulting in higher prices for consumer goods.

Bangladesh Bank officials attribute the depletion of foreign reserves to soaring import payments, driven by escalating commodity prices resulting from the Russia-Ukraine war. Over the past six months, foreign reserves have significantly dropped, while the value of the taka has depreciated by 27 per cent against the dollar, falling from 84 to 107. This has created a severe dollar crisis for businesses operating in Bangladesh. Consumer Association of Bangladesh data show that prices of 56 consumer products, including essential imports like edible oil, sugar, and lentils, have risen by 20 to 30 per cent in recent months.

The Russia-Ukraine war has posed significant economic challenges before Bangladesh, with declining foreign reserves, currency depreciation, and soaring import costs, leading to a severe dollar crisis and higher consumer prices. In this situation, the government must come out with a concrete plan in order to obviate the crisis for survival of all people even if the war continues further.

Tasmia Nusrat,

Student of Department of Finance and Accounting,

School of Business and Economics,

North South University, Dhaka,

[email protected]

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