What is the impact of the Russia-Ukraine war on Bangladesh’s economy?
The impact of the Russia-Ukraine war could increase Bangladesh’s foreign trade deficit and depreciate against the dollar. If this war is prolonged, the price of fuel oil will increase in the world market. As a result, the cost of transportation and agricultural production will increase in the country. The price of liquefied natural gas (LNG) is also expected to rise. Exports of garments made in Russia could also be threatened.
A Foreign Ministry report on the economic impact of the Russia-Ukraine war in Bangladesh has raised these concerns. The report was presented at a meeting of the Parliamentary Committee on Foreign Affairs held at the Jatiya Sangsad Bhaban on Wednesday.
Russia launched an attack on Ukraine on February 24. Ukrainian forces also began to resist them. The United States and its Western allies have sided with Ukraine. In the meantime, the Western countries have imposed various sanctions on Russia. Russia’s assets in the US and European countries have been seized. Russian businessmen are also on the verge of sanctions. These sanctions have already had an impact on the world market. World food prices have risen to the highest level in three decades.
According to the report of the Ministry of Foreign Affairs of Bangladesh on the impact of this war, if the war continues, there is a danger of an increase in the fare and insurance fee of cargo ships. Bangladesh exports all its products on FOB (Free On Board) basis
That is why the cost of exporting goods will not increase. However, most of the imports are on C&F (cost and freight) basis. As a result, the cost of importers will increase due to the fare of cargo ships. This will affect the price of imported goods.
Imports will increase, which will increase the trade deficit. According to the report, the trade deficit in the first half of the current fiscal year stood at 1,561 crore dollars. At the same time last fiscal year, the deficit was 60 million. Increasing pressure on the foreign exchange rate could lead to further depreciation of the rupee against the dollar.