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Q1 FY25 FDI inflow into Bangladesh down 71% YoY; lowest in 11 years

23 Jan '25
1 min read
Q1 FY25 FDI inflow into Bangladesh down 71% YoY; lowest in 11 years
Pic: Adobe Stock

Insights

  • Bangladesh's net FDI inflow during Q1 FY25 fell by 71 per cent YoY to $104 million—the lowest in 11 years, the Bangladesh Bank said.
  • The drop was attributed to political instability and economic uncertainty related to the student-led mass upsurge and subsequent fall of the Sheikh Hasina-led government during the period.
  • Reinvested earnings accounted for $73 million of the net FDI in Q1 FY25.
Bangladesh’s net foreign direct investment (FDI) inflow during the first quarter (Q1, July-September) of fiscal 2024-25 (FY25) fell by 71 per cent year on year (YoY) to $104 million—the lowest in 11 years, according to the Bangladesh Bank.

The drop was attributed to political instability and economic uncertainty related to the student-led mass upsurge and subsequent fall of the Sheikh Hasina-led government during the period.

Central bank officials feel lingering economic instability, including currency devaluation, and deteriorating credit ratings from international agencies might have dampened investor confidence in the country, according to domestic media reports.

Reinvested earnings accounted for $73 million of the net FDI in Q1 FY25. Reinvested earnings constituted 70 per cent of the net FDI inflow in the quarter, meaning a significant portion of the country's FDI inflow came from returns generated by previous foreign investments being reinvested.

Additionally, $77 million of FDI came as equity capital, while intra-company loans decreased by $45 million.

Fibre2Fashion News Desk (DS)

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