Bangladesh recorded a rebound in foreign direct investment (FDI) in the fiscal year 2024-25, with net inflows rising to $1.71bn, central bank data show.

The figure represents nearly 20% growth from the previous year, when political turmoil surrounding national elections dampened investor sentiment and drove FDI to a three-year low.

Economists and business leaders welcomed the recovery as a positive signal, but cautioned that the overall level remains far below what is required to sustain Bangladesh’s long-term development ambitions.

“It is good to see this uptick, but it is important to understand how much came from new investors versus reinvestments by those already operating in Bangladesh,” said Syed Akhtar Mahmood, former World Bank specialist. He noted that reinvestments may reflect growing confidence but could also be a response to high local borrowing costs.

Rupali Chowdhury, former president of the Foreign Investors’ Chamber of Commerce and Industry, said Bangladesh needs at least $8bn annually in FDI to raise GDP growth by 1% each year and move toward high-income status. Current inflows, she added, remain between $1.5bn and $3bn.

Chowdhury pointed to energy shortages, weak logistics, and policy uncertainty as key barriers. She compared Bangladesh’s performance with regional peers, noting Vietnam attracted $36bn in commitments in 2024 and India more than $28bn.

Ashraf Ahmed, former president of the Dhaka Chamber of Commerce and Industry, credited both government and private sector initiatives for the recent rise, while analysts urged sustained reforms and greater efforts to attract new greenfield investments.