Bangladesh’s net foreign direct investment inflow dropped to $104 million in Q1 of FY 2024-25, the lowest in 11 years and a 71% decline from $361 million in the same period of FY 2023-24. The decrease is attributed to political instability, economic uncertainty following the fall of the Sheikh Hasina-led government, and protests in various sectors.
Central bank data shows that reinvested earnings made up 70% of net FDI inflow, while equity capital contributed $77 million, and intra-company loans declined by $45 million. Factors such as currency devaluation, deteriorating credit ratings, and policy uncertainty under a new government also dampened investor confidence. Recent credit rating downgrades by Moody’s and S&P further weakened Bangladesh’s investment climate.
Experts highlight that foreign investors face challenges like dollar shortages when repatriating earnings, leading them to reinvest locally. To boost FDI, stakeholders emphasize restoring law and order, stabilizing economic conditions, and rebuilding investor confidence, which are also essential for improving private investment.
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