Remittance, one of the few bright spots in Bangladesh’s struggling economy, has shown signs of a slowdown following back-to-back Houthi missile strikes targeting King Khalid International Airport in Riyadh on October 10 and 11.
On October 13, further reports emerged of attacks targeting Saudi Aramco’s administrative headquarters in Dhahran and facilities in Dammam, raising concerns about the security of critical energy infrastructure.
Back in Bangladesh, daily remittance inflows have declined for three consecutive days, according to Bangladesh Bank data.
Saudi Arabia is the largest destination for Bangladeshi overseas workers and one of the country’s leading sources of remittances.
Around 3.5 million Bangladeshis work in the Gulf kingdom. Bangladesh Bank data show that remittances from Saudi Arabia totalled 5.85 billion dollars last year, accounting for 16.33 percent of all inflows and making it the leading source of remittances.
The central bank, however, has yet to attribute the latest slowdown to the escalating conflict in the Middle East. Prolonged hostilities, though, could pose a serious risk to Bangladesh’s remittance lifeline.
However, the available data do not establish a direct link between the decline and the attacks.
Arif Hossain Khan, executive director and spokesperson for Bangladesh Bank, told Daily Waadaa that the central bank had not yet observed any impact of the conflict on remittance inflows.
Cumulative remittance inflows, meanwhile, have continued to grow year on year.
Md Shariful Islam, public relations officer at the Ministry of Expatriates’ Welfare and Overseas Employment, believes the immediate fallout will be limited.
“The immediate impact on remittances is likely to be limited, as the main disruption is affecting travel. The main challenge is ensuring that stranded workers can reach their destinations,” he said.
The government is coordinating with the civil aviation and foreign affairs ministries to reroute affected flights, help stranded passengers reach their destinations and address visa or travel-permission problems through bilateral discussions.
“The Ministry of Civil Aviation and Tourism is helping address flight-related problems, while the Ministry of Foreign Affairs is handling bilateral discussions on issues such as visa extensions,” Shariful added.
On longer-term risks, he said, “If the conflict continues and affects Saudi Arabia’s economy, it could have implications for future employment opportunities for Bangladeshi workers.”
Economists do not expect the latest escalation to cause a severe immediate shock to Bangladesh’s remittance inflows, but warn that prolonged disruption to regional trade could eventually affect Saudi Arabia’s economy and employment market.
Dr AKM Nazrul Islam, professor and deputy director of the BIDS Graduate School of Economics, said the longer-term concern extended beyond the current conflict to the sustainability of overseas employment for Bangladeshi workers as technology and artificial intelligence reshape global labour demand.
“I do not expect any severe immediate impact on Bangladeshi migrant workers or the country’s overall remittance inflows,” he said.
On trade, he said, “If the disruption around the Bab-el-Mandeb Strait remains unresolved, it could affect Saudi Arabia’s economy and the global economy, eventually putting pressure on the kingdom’s job market.
“The bigger question is whether Bangladeshi workers will remain competitive in five, 10 or 20 years, as technological advances, including AI, change global demand for labour,” he added.
Bangladesh’s economy is struggling with persistent inflation, weak private investment and sluggish job creation. Poor tax collection has forced the government to rely more heavily on bank borrowing, potentially squeezing credit available to businesses.
Despite lower interest rates, private-sector lending remains weak, while sluggish imports of capital machinery point to subdued investment and limited capacity expansion. Weak export performance adds to the pressure on foreign-exchange earnings.
Against this backdrop, remittances have become a critical economic buffer, supporting foreign-exchange reserves and helping sustain household consumption. Any prolonged disruption to remittance inflows could therefore intensify pressure on external stability and domestic demand at a time when other sources of economic growth remain fragile.
The World Bank has already lowered its GDP growth forecast for Bangladesh to 3.4 percent for FY2026–27, while the IMF has cut its projection further to 3.2 percent, signalling mounting concerns over the country’s economic outlook.