Policy predictability and stability have become more critical for Bangladesh as the US-Israeli war on Iran threatens to raise fuel, fertiliser, shipping, and production costs and make businesses more cautious about investment, the International Chamber of Commerce-Bangladesh (ICCB) said.
For Bangladesh, the shock comes through several channels at once. The country depends heavily on imported fuel, fertiliser and other essential commodities, leaving businesses and consumers exposed to higher global prices and freight costs.
In the editorial of its latest quarterly bulletin, the chamber said a prolonged conflict could therefore add to inflation, widen the trade deficit, increase the government’s energy subsidy burden, and raise production costs for export-oriented industries, particularly the ready-made garment sector.
Higher fertiliser costs could push up agricultural production expenses and food prices. At the same time, uncertainty over energy prices, shipping and supply chains can make it harder for companies to forecast costs, price goods and decide when to invest.
That could discourage foreign investment and complicate Bangladesh’s efforts to sustain growth, maintain macroeconomic stability and manage its graduation from the Least Developed Country (LDC) category.
The cost of the uncertainty is already visible in investment decisions elsewhere.
An International Chamber of Commerce and Oxford Economics analysis cited by ICCB found that the rise in economic policy uncertainty in 2025 reduced real business investment across 10 major economies by 1.4 per cent, or about $202 billion in lost or delayed capital spending.
The analysis suggests the damage could deepen if uncertainty persists. Under an adverse 2026 scenario, the investment loss could reach $380 billion. If policy clarity improves instead, businesses could invest an additional $252 billion — a potential swing of more than $630 billion.
For companies, the calculation is straightforward: predictable policies and stable conditions reduce the risk of committing capital. When regulations, costs and market conditions become harder to anticipate, businesses can delay investment, hold back expansion and protect cash even when profitable opportunities remain.
The Iran conflict is adding to those risks through energy markets and trade routes. Disruptions to energy infrastructure and threats to shipping through the Strait of Hormuz, one of the world’s main oil transit routes, can push up oil, gas, freight and insurance costs.
Those increases can ripple through factories, transport networks and food supply chains.
The pressure is particularly significant for developing economies that rely on imported energy and food.
Higher fertiliser and freight costs, combined with disrupted supply chains, could fuel inflation, weaken growth, widen fiscal deficits and increase debt burdens, ICCB said.
Businesses are responding by diversifying suppliers, holding stronger inventories and investing in digital trade systems to reduce their exposure to geopolitical shocks. But such adjustments require time and capital and cannot eliminate the effects of a prolonged disruption to global trade.
ICCB therefore called for diplomacy to take precedence over confrontation and urged governments, international organisations and the private sector to preserve open trade routes and ensure uninterrupted access to food, energy and essential commodities.
The assessment appeared in an editorial in ICCB’s April-June 2026 News Bulletin released on Monday.
The chamber said the conflict demonstrates how quickly geopolitical shocks can move through energy markets, shipping routes, supply chains and investment decisions.
For Bangladesh, the lesson is broader than the prospect of a higher import bill.
When external costs become volatile, policy stability becomes a buffer: it cannot prevent a global shock, but it can give businesses greater visibility to plan investment, manage costs and keep operating through it, said the ICCB.
