The country continues to experience a steady fall in new foreign investments, with figures for the April–June quarter showing a decline of nearly 62 percent. Experts say this downward trend is unlikely to change unless political stability is restored and the investment climate improves. Nevertheless, total Foreign Direct Investment (FDI) recorded a modest rise during the same period, driven by higher reinvested earnings.
According to Bangladesh Bank data, in the final quarter of the last fiscal year (April–June), foreign investors brought in new investments worth $81 million, compared to $214 million in the same period of 2024. This marks a decline of $133 million, or 62 percent, over one year. New investments also decreased compared to the previous quarter.
While new investments amounted to $81 million in April–June, the figure was $264 million in January–March—a 69 percent drop. During the same time, intercompany loans also declined. In April–June, such loans totaled $53 million, down from $92 million in the previous quarter.
Despite the decline in new investments and intercompany loans, reinvested earnings increased sharply. Companies reinvested $258 million in April–June this year, compared to just $33 million in the same period last year—an increase of more than fourfold. This rise in reinvested earnings contributed to a modest increase in overall FDI.
Data shows that net FDI reached $300 million in the final quarter of the fiscal year 2024–25, up from $270 million during the same period of the previous fiscal year—an 11.4 percent rise. In the fiscal year 2023–24, total FDI inflows amounted to $1.47 billion.
Analysts point out that although Bangladesh’s interest rates are higher than those of neighboring countries like India, this alone has not been enough to attract foreign investors. They argue that political instability and economic uncertainty are the main deterrents. High inflation, they add, reduces investors’ real profits, further discouraging investment.
Former Director General of the Bangladesh Institute of Bank Management, Toufic Ahmad Chowdhury, said, “The investment climate must be improved. Without domestic investment growth, foreign investment will not increase either. Political stability and an improved business environment are both essential for boosting investment.”
Planning Adviser Dr. Wahiduddin Mahmud noted that desired investment levels in both public and private sectors remain below expectations, and addressing this issue will not be easy or quick.
To attract more foreign investment, the government has planned to establish 20 new economic zones by 2046 as part of a national master plan. Supported by World Bank funding, this master plan aims to ensure optimal resource use and gradually attract both domestic and foreign investments. Officials believe it will also help address major challenges such as land acquisition, infrastructure development, and investor confidence.
Bd-pratidin English/FNC
