You don’t have to exercise in order to lose body fat. However, exercise will massively boost your results and esteem. We are not designed to sit still for long periods of time, a lack of movement increases the risk of disease. Even just 10 minutes of movement can have a huge positive impact.
Also, different types of exercise will have different effects:
Strength training will help you lose weight by building muscle and increasing your basal metabolic rate.
HIIT (high intensity interval training) will help you burn more calories and it won’t increase your appetite.
Moderate cardio (e.g. walking or light cycling) is good for your general health but doesn’t boost weight loss that much.