Net FDI rebounds in Q2 after 28% fall in first half

Bangladesh’s net foreign direct investment (FDI) rose 12.78 per cent year-on-year in the April-June quarter, driven by higher reinvestment of profits by existing foreign investors. However, the quarterly recovery followed a 28 per cent decline in net FDI inflows in the first half of 2026 compared with the same period a year earlier.

Net FDI reached $346.94 million in April-June, up from around $307.6 million in the same quarter of 2025, according to Bangladesh Bank data released by Invest Bangladesh.

For January-June, however, net FDI fell to around $795 million from more than $1.1 billion a year earlier, highlighting continued weakness in fresh foreign investment.

Reinvested earnings rose 55.08 per cent year-on-year to $260.91 million in the second quarter, accounting for the bulk of net FDI. In contrast, net equity investment declined 4.77 per cent to $77.42 million, while net intra-company lending plunged 85.17 per cent to $8.61 million.

The figures suggest that while existing foreign businesses continue to reinvest their profits, Bangladesh is still struggling to attract fresh capital.

“The year-on-year growth in overall FDI is encouraging, particularly against a backdrop of continued global economic uncertainty, geopolitical tensions and higher energy costs,” said Nahian Rahman Rochi, a member of Invest Bangladesh’s Investment Development Wing.

“Fresh equity investment remains challenging as investors globally continue to take a cautious approach,” he said.

Rochi said the strong growth in reinvested earnings reflected existing investors’ confidence in the long-term prospects of their operations and could support business expansion, employment and productive capacity.

Net FDI outside export processing zones (EPZs) rose 20.75 per cent year-on-year to $280.88 million in April-June. However, net investment in economic zones fell 25.33 per cent to $4.51 million, although it increased from $0.42 million in the preceding quarter.

Invest Bangladesh is working to advance an investment pipeline worth $1.3 billion, aiming to convert prospective projects into actual investments.

Rochi said development of the Chinese Economic and Industrial Zone was under way after delays of more than a decade. The project has a target completion date of 2028 and around $500 million in prospective investment.

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