UN Trade and Development (Unctad) reported that net foreign direct investment (FDI) in Bangladesh declined by 13.20% to $1.27 billion in 2024 from $1.47 billion in 2023, resulting in a decline for the fourth consecutive year since 2021.
Bangladesh saw a slight decline of 13% to $1.3 billion, but this followed a strong performance in 2023 and maintained the country’s position as a top least developed country (LDC) recipient, added the report, titled the World Investment Report 2025, released on Thursday.
FDI as a ratio of gross fixed capital formation in the country also came down to below 1% in the last year.
Stock of FDI in the country stood at $18.30 billion at the end of 2024 which was $17.83 billion at the end of 2023, according to the report that uses the statistics available with Bangladesh Bank.
The value of announced greenfield investment in Bangladesh also declined sharply to $1.75 billion in the last year which was $2.70 billion in 2023.
In South Asia, greenfield FDI registered a modest growth of 5.80% in the last year, according to the Unctad report.
Global FDI dropped by 11% in the last year, marking the second consecutive year of decline and also confirming a sharp slowdown in productive capital flows.
The report added that although global FDI rose by 4% in 2024 to $1.5 trillion in regular count, volatile financial conduit flows through several European economies pushed the rise.
But the financial conduit flows often serve as transfer points for investments, making it a ‘double-counting’ of foreign investment and also push an artificial increase. That’s why Unctad excluded the high levels of conduit flows to get a more realistic picture of global FDI.
According to the Unctad publication, the investment landscape in 2024 was shaped by geopolitical tensions, trade fragmentation, and intensifying industrial policy competition.
The report pointed out that these dynamics, combined with elevated financial risk and uncertainty, are now redrawing global investment maps and also eroding long-term investor confidence.
Unctad also projected that the outlook for international investment in 2025 is negative.
While modest growth seemed possible at the start of the year, trade tensions have led to downward revisions of most indicators of FDI prospects, including gross domestic product (GDP) growth, capital formation, exports of goods and services, foreign exchange and financial market volatility, and investor sentiment, it explained.
It also showed that greenfield investment in the digital economy nearly tripled to $360 billion in the last year since 2020. Most or around 78% greenfield investment in the digital economy flows to 10 developing countries.
The report also mentioned that data centres have become a target for international greenfield investment in the digital economy, adding that only 3% of global investment in data centres went to the LDCs.
