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Bangladesh’s net foreign direct investment (FDI) plunged to $1.27 billion in 2024 — the lowest in five years — as political turmoil and economic instability eroded investor confidence, according to data from the central bank.
This marks a 13.25% year-on-year drop from $1.46 billion in 2023. Experts attributed the decline to sluggish investment in the first half of the year, followed by widespread student-led protests that led to the fall of the Awami League government in August. The resulting political vacuum, interim governance, and volatile foreign exchange conditions further weakened investor sentiment.
A senior banker said, “We saw very little foreign investment in the first half. Then came the mass protests and political change, which worsened law and order. Although stability began to return after December, investors remained cautious.”
Central bank data show that of the total FDI in 2024, $622 million came from reinvested earnings — accounting for nearly 49% of the total. Equity capital contributed $545 million, and intra-company loans made up $104 million.
A central bank official noted that high returns from existing investments encouraged reinvestment. However, many investors faced difficulties repatriating profits due to a shortage of US dollars, pushing them to reinvest earnings locally.
Sector-wise, the banking industry attracted the highest FDI at $416 million, followed closely by the textile and wearing sector with $407 million. Pharmaceuticals, chemicals, energy, and food sectors also saw notable investment.
Another senior banker echoed concerns over policy uncertainty. “Investors are waiting to see the direction of policies under a stable government. The current administration is interim, so long-term commitments are being delayed.”
Despite the downturn, there are signs of optimism. In April, the Bangladesh Investment Development Authority (Bida) and the Bangladesh Economic Zones Authority (Beza) jointly hosted the Bangladesh Investment Summit 2025, drawing 415 foreign delegates from 50 countries.
Chowdhury Ashik Mahmud Bin Harun, executive chairman of Bida and Beza, expressed hope that the summit would pave the way for fresh investments.
The Senior banker, however, said results may take at least a year to materialize.
To reverse the trend, a banker stressed the need for financial sector reforms, transparency, and long-term policy certainty under a political government to restore investor confidence and attract sustainable FDI.
