El Niño Gathers Force; BD Economy Has Little Room To Absorb

Farmers transplanting paddy seedlings in Bangladesh.

Special Correspondent

The weather threat is real but uncertain. The larger danger lies in fertiliser, fuel and food costs that have already climbed.

Bangladesh’s farmers read the sky for a living. This year the world’s forecasters read it with them. The World Meteorological Organization said on 31 July that a strong El Niño was developing and would intensify through October. The US Climate Prediction Centre put the chance of one of the most powerful events since 1950 at 81 percent, with a peak between October and December. 

For Dhaka, though, the pressing question concerns the economy more than the weather. Scientists disagree on how hard the event will strike. Economists agree on something simpler: Bangladesh enters this shock with its defences already worn thin.

A cushion already spent

The IMF projects growth slowing to 3.2 percent this financial year, with inflation near 11 percent. The finance minister, speaking at the Bangkok annual meetings, has played down those numbers, but he is negotiating support from the Fund and the World Bank with no deal in hand. Any fresh drain on reserves or prices lands on that unfinished business.

The World Bank’s June assessment named the problem. It found Bangladesh’s most immediate danger lies in convergence: a possible rainfall deficit landing on top of already elevated fertiliser and energy costs. Heat, coastal salinity and local floods could each dent harvests and incomes at once. 

Rice, rain and fertiliser

Rice is the national staple and the backbone of rural incomes. Boro accounted for around 53 percent of output in 2024-25, and Aman about 41 percent. Aman depends on monsoon rain, which is where El Niño’s usual influence bites. Late or thin rain can slow planting, raise irrigation costs and cut yields. 

The scale of potential loss is easy to exaggerate. The World Bank said rice output could fall 20 to 50 percent in severely affected areas, but described that as a risk scenario rather than a forecast of national decline. Bangladesh’s own record argues against simple formulas. A study using data from 1958 to 2017 found that El Niño’s influence varied by region and by season. 

Costs offer firmer ground than yields. The World Bank projects fertiliser prices rising 38 percent over the full year. In June it approved an emergency programme to finance 600,000 tonnes of fertiliser imports, meant to support about 14 lakh hectares of smallholder rice. Farmers who cannot afford inputs plant less or fertilise less, and the cost reaches the market stall either way. 

Weather has already done damage this year. Rivers in the north-east overflowed from late April, flooding standing Boro fields at harvest. Heavy pre-monsoon rain damaged more than 200,000 tonnes of rice. In July, intense rain reportedly inundated more than 100,000 hectares of farmland. El Niño arrives after a hard year, not a quiet one. 

2026 Bangladesh crop damage 

Heat, power and the factory floor

Bangladesh imports nearly all its energy, so heat becomes a fiscal problem. The country relies on imports for about 95 percent of its energy needs. Research suggests that above 20 degrees Celsius, electricity demand rises about 2.8 percent for each extra degree. Earlier this year the Bangladesh Meteorological Department forecast up to ten heatwaves over a three-month stretch. 

Garment workers face heat risks as energy cuts curb cooling 

An energy analyst at the IEEFA describes a squeeze from both ends. Hotter weather lifts the electricity Bangladesh needs, while a strong El Niño can cut cheap hydropower across Asia, leaving replacement fuel dearer. Dhaka competes for that fuel in the same markets. 

The garment sector, Bangladesh’s export engine, feels the strain first. Power outages, rising fuel prices and weak global demand have already forced factories to cut production and lay off thousands of workers. Petrochemical inputs make up roughly 65 percent of the cost of producing a garment, and naphtha prices have climbed nearly a third since the Middle East conflict began. Some factories have switched off fans and coolers, leaving workers sweltering and productivity falling. 

Garment sector under pressure from energy crisis and rising costs 

Prices and the poor

Food prices carry the shock into households. Bangladesh could face higher prices even when domestic production losses stay relatively limited. Past El Niño events have contributed to volatility in global markets for rice, wheat and edible oils. The FAO cereal price index reached its highest level since May 2024 in August. 

El Niño Impact on Bangladesh 

The World Food Programme estimates this El Niño could push at least 49 million more people into acute hunger globally by the end of 2027. Analysts say poorer, rural and farm households in Bangladesh carry the heaviest load. 

One Sanem model estimated that a sharp fossil-fuel price shock could shrink GDP by 0.79 percent and lift inflation by 1.19 percent. Those figures do not measure El Niño itself, only the country’s exposure to outside shocks. If a climate shock coincides with the existing energy and power crises, the combined effect could be considerably larger. 

Precedent offers a warning. After the 2023 El Niño, the government approved rice imports to steady domestic prices, and vegetable exports reportedly fell 58 percent in the first half of fiscal 2024-25. Heat has a record too: during the 2023-24 event, temperatures reached 40 to 43 degrees Celsius across 51 of the 64 districts. 

What nobody yet knows

Honest forecasting requires caveats. One climate scientist at Arizona State University expects only a moderate monsoon impact, and says Bangladesh may avoid the severe drought of 1982-83 or 1997-98. Another expert warned of the opposite danger: torrential bursts of rain that trigger sudden floods. The sources reviewed report no measured Aman loss so far. The FAO expects rice imports to fall to 800,000 tonnes this year from 1.9 million last year, which hints that supply is not desperate. 

Bangladesh may feel El Niño’s heat, but not its full force

Preparation over prophecy

Analysts urge investment in stress-tolerant rice varieties, better water management, efficient irrigation and sharper weather forecasting. One commentator also urges the health ministry to activate dengue and cholera surveillance and pre-position supplies before a possible late-2026 disease peak. Social protection for farm households, which analysts also favour, would cost money Dhaka is still trying to secure. 

The test for ministers lies in whether they treat El Niño as weather or as a macroeconomic risk. Lenders will ask. A weak Aman harvest at the wrong moment would lift import bills, drain reserves and feed inflation just as Dhaka seeks IMF and World Bank money on workable terms. A benign monsoon would ease all of that and leave the forecasts looking overdone. Neither outcome is certain.

What the arithmetic already shows is that Bangladesh pays far more for fertiliser and fuel than it did, and has less room to pay it. El Niño does not create that weakness. It tests it.                                                                                                                                                                                                                                                                         The writer is head of news at The Mirror Asia, a Germany-based online news site.