STAR BUSINESS REPORT

Bangladesh’s net foreign direct investment (FDI) inflows rose 39.36 percent year-on-year to $1.77 billion in 2025, according to a press release issued by the Bangladesh Investment Development Authority (Bida) yesterday.

However, the increase was driven mainly by higher reinvested earnings and intra-company loans, while fresh equity investment remained largely stagnant.

Net FDI inflows stood at $1.27 billion in 2024, according to the latest Bangladesh Bank data in the release.

The latest figures suggest Bangladesh is still struggling to attract major new foreign investors despite signs of recovery in overall investment inflows.

Equity capital -- widely considered the clearest indicator of fresh foreign investment -- rose only 1.84 percent year-on-year to $554.64 million in 2025.

In contrast, reinvested earnings surged 318.25 percent to $434.10 million from just $103.79 million in 2024, while intra-company loans increased 25.68 percent to $781.68 million.

The sharp rise in reinvested earnings came partly from a low base effect after foreign investors sharply reduced retained earnings in 2024 amid foreign exchange shortages, import restrictions and broader economic uncertainty.

The data indicate that existing foreign firms continued to maintain or selectively expand their operations in Bangladesh, but new investment appetite remained subdued.

The recovery also came against a difficult global backdrop.

According to the United Nations Conference on Trade and Development (UNCTAD), global greenfield project announcements fell 16 percent in 2025 as developing economies faced mounting pressure from weaker investor sentiment and slowing global growth.

In a report released on April 28, the UN body said foreign direct investment into Bangladesh rose to $1.77 billion in 2025 “after several difficult years marked by foreign exchange pressures, global shocks and domestic uncertainty”.

It added that the rebound showed “that investors remain engaged even under tighter conditions”.