BD still losing global investment race despite FDI surge

Bangladesh continues to lag far behind its regional rivals in attracting foreign direct investment (FDI), despite a sharp rise in inflows that officials are portraying as a sign of economic resilience amid global uncertainty and domestic turbulence.

A latest report by United Nations Conference on Trade and Development (UNCTAD) revealed that net FDI inflows into Bangladesh increased by 39.36 per cent in 2025, but warned that the country remains significantly underperforming compared with competing Asian economies when investment is measured against the size of its economy, population and capital formation.

The findings expose Bangladesh's continuing struggle to position itself as a major global investment destination despite years of policy promises, investment summits and reform pledges.
According to the latest foreign investment survey by Bangladesh Bank, net FDI inflows rose from US$1.27 billion in 2024 to US$1.77 billion in 2025.

However, the UNCTAD assessment said Bangladesh still trails not only regional competitors but also the average performance of least developed countries (LDCs), the Association of Southeast Asian Nations (ASEAN) and the Regional Comprehensive Economic Partnership (RCEP) - two major economic blocs Bangladesh is seeking to join to secure its future trade competitiveness after LDC graduation.

The report underscored a painful reality for policymakers: while neighbouring economies continue to attract massive manufacturing relocations, technology investments and export-oriented industries, Bangladesh remains trapped in low-value and limited-scale investment inflows.

Officials of the Bangladesh Investment Development Authority (BIDA) said the rise in investment inflows was largely fuelled by reinvested earnings and inter-company loans rather than fresh equity investment - a sign that existing investors are retaining operations but new global capital remains cautious.

According to BIDA data, reinvested earnings soared by 318.25 per cent to US$434.10 million in 2025 from only US$103.79 million a year earlier. Inter-company loans also climbed 25.68 per cent to US$781.68 million, while equity capital - considered a stronger indicator of new foreign investment - rose by only 1.84 per cent to US$554.64 million.