Private investment in Bangladesh dropped to 22.03% of GDP in the fiscal year 2024–25, the lowest level in 11 years, as per data from the Bangladesh Bureau of Statistics cited by The Daily Star. This decline highlights challenges in the investment climate and broader macroeconomic stress in the country. Public investment also decreased for the third consecutive year, standing at 6.51% of GDP in FY25, down from 6.74% the previous year.
Economists express worry over the declining investment trend as it indicates fewer job opportunities, especially with a significant number of young people entering the labor market annually. They caution that lower investment levels could impact Bangladesh’s future economic growth. M Masur Reaz, chairman of Policy Exchange Bangladesh, emphasizes the need for higher investment to boost employment and enhance exports.
Reaz notes the necessity for comprehensive reforms that should have been initiated nearly a decade ago but were only partially implemented. The uncertainty escalated after the mass uprising in July 2024, resulting in the ousting of former Prime Minister Sheikh Hasina. Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh, points out that weak business conditions, infrastructure limitations, and escalating production costs have diminished the country’s competitiveness in global markets.
Rahman warns that the decline in private investment poses significant challenges for Bangladesh’s long-term development. Syed Akhtar Mahmood, former global lead for regulatory reforms at the World Bank Group, attributes the low investment rate to both short-term issues and structural problems. Mahmood explains that some major companies had borrowed extensively at lower interest rates and may now struggle to secure additional loans, even if new investment prospects emerge.
