Reviving investment amid troubled times

Bangladesh's investment climate is facing mounting challenges, with private sector investment slowing as businesses struggle against rising costs and financial constraints. Inflation remains high at over 9 per cent, while a persistent US dollar shortage continues to disrupt imports, affecting industrial production. Additionally, rising bank interest rates - now exceeding 12 per cent in some cases - have made borrowing costlier, discouraging entrepreneurs from expanding their operations.

Political uncertainty ahead of the recent elections further dampened investor confidence, leading to a sharp decline in fresh investments. According to Bangladesh Bank, private sector credit growth fell to 9.92 per cent in November 2024, well below the target of 11-12 per cent. Without immediate policy interventions - such as stabilising the currency, easing trade restrictions, and ensuring a predictable regulatory environment - capital outflow could accelerate.

To restore confidence, the government must foster economic stability through reforms, transparent policies, and incentives that attract both domestic and foreign investors. A proactive approach is now critical for sustained growth.

Afra Ashika

Bachelor of Business Administration

North South University

afra.ashika@northsouth.edu