JAGARAN CHAKMA

Bangladesh’s net foreign direct investment witnessed a sharp 39 percent increase in 2025, reaching $1.77 billion, according to central bank data.

The growth, however, was driven almost entirely by existing foreign firms, not new investors entering the market.

Bangladesh Bank (BB) data shows that net FDI stood at $1.27 billion in 2024.

Meanwhile, net equity inflows, the most direct measure of new investment, stood at $554.63 million last year, barely changing from $544.63 million a year earlier.

The increase in overall FDI instead came from reinvested earnings, which rose to $781.67 million from $621.96 million, and from intra-company loans, which surged more than fourfold to $434.11 million. Both reflect existing companies financing their local operations rather than fresh capital coming in.

Economists say despite the growth in 2025, the net FDI inflow remains insignificant relative to the size of the economy, particularly in terms of fresh investment. Data indicates that the country is struggling to attract new investors or major expansion projects. In a healthy FDI environment, rising net inflows are typically accompanied by strong equity growth, signalling new projects, job creation, and technology transfer.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development, said equity inflows have been persistently low for some time.

“Equity investment is very low, which suggests that new investors are not coming. What we are seeing is largely expansion by existing investors,” he said, attributing the weak equity inflows to broader macroeconomic vulnerabilities and an unfavourable investment climate.

The economist also questioned the gap between official claims and actual outcomes, saying that while the Bangladesh Investment Development Authority (Bida) continues to highlight investment prospects, the ground reality does not reflect strong or meaningful inflows.

Rupali Chowdhury, president of the Foreign Investors’ Chamber of Commerce & Industry, pointed to several factors behind the weak inflows.

According to her, the shift to an interim administration, from mid-2024 till February this year, has created uncertainty around long-term investment decisions. In addition, delays in government-backed projects have raised concerns about policy continuity and contract enforcement.

Furthermore, she said episodes of social unrest and “mob culture” have damaged Bangladesh’s