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but it hasn’t fully returned to pre-crisis levels,” said M Masrur Reaz, chairman and chief executive of Policy Exchange Bangladesh, a local think tank.

“It’s vital to verify whether these inflows represent genuine new investments or mainly financial adjustments,” added the economist.

In January–March, reinvested earnings, which are a key indicator of confidence among existing investors, fell by 24 percent year-on-year, dropping to $194.71 million from $257.26 million a year earlier.

At the same time, outflows rose to $711 million, up from $651 million in the first quarter of 2024.

Zaved Akhtar, chairman and managing director of Unilever Bangladesh, said more firms appeared to be leaning on intra-company loans as interest rates in the local banking sector spiked.

Akhtar, also president of the Foreign Investors Chamber of Commerce and Industry (FICCI), said that if the funds are only used to cover operational costs or liquidity gaps, they do little to benefit the broader economy.

“But if the funds go into local investments, they can generate jobs and boost the economy,” he said, urging closer assessment of the data.

Akhtar pointed out that investment still remains low as a share of GDP, and fresh equity comprises just 30 percent of the total inflow. Declining reinvested earnings also reflect caution among current investors. “We need to push all these other levers of FDI,” he said.

Selim Raihan, executive chairman of local think tank South Asian Network on Economic Modelling (Sanem), agreed that while the net FDI inflow in the first quarter of 2025 was encouraging, much of it came in the form of intra-company loans, which do not necessarily signal stronger greenfield investment.

“Inflows of FDI through intra-company loans are positive, but multinational companies usually bring in such loans from their parent companies either to finance further expansion or to manage crises,” he said.

He added that under Bangladesh’s FDI policy, these types of inflows are not usually viewed as successful outcomes of investment promotion efforts.

However, Bida’s Executive Chairman Chowdhury said that investors had kept a close eye on the second half of 2024 to assess whether the interim government could deliver on its promises, leaving FDI largely stagnant during that period.

“However, they have witnessed that the interim government has performed well and has managed to build confidence among investors,” he said.

“To maintain this momentum, it is crucial to expedite reform initiatives aimed at attracting foreign direct investment,” he added.