FDI slumps again, hits $1.27b in 2024
Staff Reporter :
Net foreign direct investment (FDI) in Bangladesh fell by 13.2 percent to $1.27 billion in 2024, down from $1.47 billion in the previous year, marking the country’s fourth consecutive annual decline in FDI since 2021, according to the World Investment Report 2025 released by the United Nations Conference on Trade and Development (UNCTAD) on Thursday.
Despite the downturn, UNCTAD noted that Bangladesh retained its position as a leading FDI recipient among least developed countries (LDCs), following a comparatively strong performance in 2023.
However, FDI as a share of gross fixed capital formation dropped to below 1 percent last year, underscoring a reduced role in financing domestic investment.
The report, based on data from Bangladesh Bank, stated that the stock of FDI in the country stood at $18.3 billion at the end of 2024, up slightly from $17.83 billion a year earlier.
Greenfield investment announcements in Bangladesh also declined significantly, falling to $1.75 billion in 2024 from $2.7 billion in 2023-a drop that contrasts with a 5.8 percent increase in greenfield FDI across South Asia over the same period.
Globally, foreign direct investment decreased by 11 percent in 2024, marking a second consecutive year of contraction and reflecting a broader slowdown in productive capital flows. While headline FDI figures indicated a 4 percent rise to $1.5 trillion, UNCTAD clarified that much of this apparent increase stemmed from volatile conduit flows routed through financial hubs in Europe.
These flows, which often serve as intermediaries rather than destinations, can distort investment data due to double-counting.
“Once conduit flows are excluded, the picture reveals a clear decline in real productive investment,” the report stated.
UNCTAD attributed the declining global investment trend to rising geopolitical tensions, increasing trade fragmentation, and intensified industrial policy competition among major economies.
These challenges, compounded by persistent financial risks and economic uncertainty, have significantly eroded investor confidence and redrawn international investment patterns.
Looking ahead, the report offered a cautious outlook for 2025. While the year began with some optimism, heightened trade tensions and revised macroeconomic forecasts-including for GDP growth, capital formation, trade volumes, and currency stability-have dampened expectations for a rebound in FDI.
The report also highlighted rapid growth in digital-sector investment, with greenfield FDI in the digital economy nearly tripling since 2020 to reach $360 billion in 2024. However, the benefits have been unevenly distributed. Around 78 percent of this investment has flowed to just 10 developing countries, while only 3 percent reached least developed countries, including Bangladesh.
Data centres emerged as a key area of interest for international investors, though investment in such infrastructure in LDCs remains minimal.
UNCTAD’s latest findings underline the urgent need for countries like Bangladesh to strengthen policy frameworks, improve investment climates, and diversify sources of external financing to remain competitive in a changing global investment landscape.