Foreign Fund Inflows to Bangladesh Corporates Decline

Foreign investment in Bangladesh’s corporate sector has seen a marked decline, raising concerns among economists and market analysts about the broader implications for the country’s economic stability. By November 2025, short-term external borrowing by the private sector had fallen to just $9.80 billion, reflecting both corporate caution and heightened macroeconomic uncertainty.

According to Bangladesh Bank data, private-sector short-term external debt has been steadily declining since mid-2023. In May 2023, the sector’s short-term foreign borrowing stood at $13.95 billion, gradually falling to $10.13 billion by March 2025 and further declining to $9.80 billion in November 2025.

Short-term Corporate External Debt Trend (Billion USD)

*Projected

Several factors have contributed to this decline. Persistent electricity shortages in industrial zones, currency depreciation, and rising political and economic uncertainty following a government change in August 2024 have all constrained private-sector appetite for external borrowing.

Among lending countries, the United Arab Emirates tops the list with $1.71 billion in short-term loans to Bangladeshi corporates, followed by Singapore ($1.64 billion), China ($0.93 billion), Hong Kong ($0.77 billion), and the United Kingdom ($0.52 billion).

A senior Bangladesh Bank official, speaking on condition of anonymity, noted, “The reduction in external borrowing may ease pressure on the country’s foreign currency reserves to some extent. However, record remittance inflows have already strengthened our reserves.”

Anowar-UL Alam Chowdhury, President of the Bangladesh Chamber of Industries (BCI), added, “Ongoing power shortages, law and order concerns, and high interest rates have made it difficult for businesses to maintain even half of their production. In this context, the reduction in foreign borrowing is hardly surprising.”

Economists warn that while the decline in short-term corporate debt may temporarily ease balance-of-payments pressures, a sustained contraction in foreign funding could hamper private-sector–led economic growth. This is particularly critical at a time when domestic investment is essential for economic recovery and long-term development.