Private investment in Bangladesh falls to 11-year low amid weak business climate

New Delhi, March 7 (IANS) Private investment in Bangladesh fell to 22.03 per cent of Gross Domestic Product (GDP) in the fiscal year 2024–25, marking the lowest level in 11 years, a report has said.

The decline reflects growing challenges in the country’s investment climate and broader macroeconomic stress, according to data released by the Bangladesh Bureau of Statistics cited by The Daily Star.

Public investment also dropped for the third consecutive year as the implementation of the government’s Annual Development Programme slowed.

Public investment stood at 6.51 per cent of GDP in FY25, down from 6.74 per cent a year earlier, the lowest level recorded since at least FY2013, as per the report.

Economists said that the declining investment trend is worrying because it signals fewer job opportunities at a time when a large number of young people are entering the labour market each year.

They also warn that lower investment could affect the country’s future economic growth, according to the report.

M Masur Reaz, chairman and founder of Policy Exchange Bangladesh, said the situation is concerning because Bangladesh needs higher investment to generate employment and strengthen exports.

Reaz said comprehensive reforms were needed nearly a decade ago but were implemented in a fragmented way.

According to Reaz, uncertainty increased after the mass uprising in July 2024 that led to the removal of former Prime Minister Sheikh Hasina.

Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh, said weak business conditions, infrastructure bottlenecks, and rising production costs have reduced the country’s competitiveness in global markets.

Rahman warned that declining private investment has serious implications for Bangladesh’s long-term development.

Syed Akhtar Mahmood, former global lead for regulatory reforms at the World Bank Group, said both short-term and structural issues have contributed to the low investment rate.

Mahmood explained that some large companies had already borrowed heavily when interest rates were low and may now be unable to take on additional loans, even if new investment opportunities arise.

–IANS

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