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