Written by The Banking Post
Foreign direct investment (FDI) in Bangladesh rebounded in 2025, signalling renewed investor confidence, but the country still faces a major challenge in diversifying inflows and ensuring sustainable long-term growth, according to a new report by UN Trade and Development (UNCTAD).
The report said FDI inflows rose to $1.77 billion in 2025, recovering from recent declines caused by global shocks, foreign-exchange pressures and domestic uncertainties. However, the figure remained below the country’s 2019 peak of more than $1.8 billion.
The recovery was driven mainly by reinvested earnings and intracompany loans, suggesting that existing investors continued to show confidence despite a difficult global environment.
Officials said Bangladesh has made progress in regulatory and institutional reforms, including efforts to digitalise services and simplify investment procedures. The Bangladesh Investment Development Authority has also been working to improve the overall business climate.
However, the report noted that future gains would depend on attracting fresh foreign capital rather than relying mainly on existing investors. It also stressed the need to broaden investment beyond traditional sectors such as textiles, finance and power.
Higher-value industries including information and communication technology (ICT), pharmaceuticals and advanced manufacturing were identified as key areas for future expansion.
UNCTAD said stronger reform implementation, better infrastructure, skills development and closer linkages between foreign investors and domestic firms would be essential to sustaining momentum.
The report added that Bangladesh’s recent experience offers important lessons for developing economies trying to navigate an increasingly complex global investment landscape.
