Introduction

Bangladesh’s growth since the mid-2010s was built on high and rising investment. Gross capital formation rose from 28.3% of GDP in 2012 to 32.2% in 2019, and GDP growth ran at 6–8% a year.12 Since then both have retreated. Growth was 3.5% in 2025, and investment 28.5%, its lowest share since 2013.12

7.9% → 3.5%

Annual GDP growth in Bangladesh, 2019 and 2025.

This article uses World Bank World Development Indicators (WDI) national-accounts series to ask what is behind the slowdown. The data show a coincident fall in investment, domestic savings and foreign investment, and a rise in the share of output going to household consumption. They cannot by themselves say which came first, and we avoid claiming a cause.

Growth and investment have fallen together

GDP growth has halved since 2019, and investment has slipped from 32% to 28.5% of GDP
GDP growth (%, bars) and gross capital formation (% of GDP, line), 2012–2025
Source: World Bank and OECD national accounts, via World Bank WDI (NY.GDP.MKTP.KD.ZG and NE.GDI.TOTL.ZS)

Growth averaged about 6.8% a year from 2012 to 2019 and peaked at 7.9% in 2019.1 It fell to 3.4% in 2020, rebounded to 6.9% in 2021 and 7.1% in 2022, then slowed each year: 5.8% in 2023, 4.2% in 2024 and 3.5% in 2025.1 The slowdown therefore began after the post-pandemic rebound, not during the pandemic itself.

Investment followed a similar arc. It held above 30% of GDP every year from 2016 to 2024, peaking at 32.2% in 2019 and 32.1% in 2022, then fell to 30.7% in 2024 and 28.5% in 2025.2 The 2.2-point fall between 2024 and 2025 is the largest one-year drop in the series since 2012.

Per-person growth tells the same story. Real GDP per person grew 7.0% in 2019 and 2.2% in 2025.3 Inflation, meanwhile, rose from 5.6% in 2019 to 10.5% in 2024 and 8.8% in 2025, so households faced slower income growth and higher prices at once.4

Savings are shrinking and consumption is rising

Domestic savings, the pool that finances most investment, fell from 27.3% of GDP in 2016 to 22.0% in 2025, the lowest share in the series since 2012.5 Over the same period the share of GDP going to household consumption was 66.9% in both 2016 and 2019, then rose to 72.2% in 2025.6

Two readings of this are consistent with the numbers, and the data do not choose between them. Families may be spending more of their income simply to maintain living standards as prices rise. Or weaker confidence and returns may be leaving less income to save and invest. A household income and expenditure survey, and firm-level data, would be needed to tell them apart.

The gap between investment and savings was 6.6 points of GDP in 2025, against 5.3 points in 2019.25 Personal remittances, which reached 7.4% of GDP in 2025 from 5.2% in 2019, are one visible inflow from outside the economy, though WDI does not link them to this gap.7

Foreign investment has all but dried up

Foreign investment in Bangladesh is 0.4% of GDP, a tenth of Viet Nam's share
Foreign direct investment, net inflows, % of GDP, 2025
Source: IMF balance of payments and World Bank, via World Bank WDI (BX.KLT.DINV.WD.GD.ZS)

Net foreign direct investment (FDI) inflows were 0.39% of GDP in 2025, down from 1.74% in 2013 and 1.45% in 2015.8 The low point was 0.28% in 2024.8 FDI has been below 1% of GDP every year since 2016.8

Regional comparators received more in 2025: Viet Nam 4.27%, Indonesia 1.57%, India 1.03%, Sri Lanka 0.96% and Pakistan 0.45%. Only Nepal, at 0.10%, received less than Bangladesh.8 FDI inflows are volatile year to year and are measured from balance-of-payments records, so the multi-year decline is more informative than any single reading.

Peers have moved in different directions

Investment is flat in Bangladesh since 2015 while India has pulled ahead and Sri Lanka has fallen back
Gross fixed capital formation, % of GDP, 2015 and 2025
Source: World Bank and OECD national accounts, via World Bank WDI (NE.GDI.FTOT.ZS)

Between 2015 and 2025 Bangladesh’s gross fixed capital formation was almost unchanged, at 28.9% and 28.5% of GDP.9 India’s rose from 28.7% to 31.7%. Viet Nam (30.2% to 29.2%) and Indonesia (32.8% to 28.8%) edged down, and Sri Lanka (28.3% to 20.8%), Nepal (27.6% to 23.6%) and Pakistan (14.1% to 12.6%) fell.9

Bangladesh therefore still invests more than most of its neighbours, and the 2025 drop is recent. The weakness is less the level than the direction: the investment share is falling in the same years that growth has halved, and FDI is among the lowest in the comparison group.

Government revenue is a related constraint. The most recent WDI figure for Bangladesh’s tax revenue is 7.6% of GDP in 2021, against 9.0% in 2012.10 The series has not been updated since 2021 in WDI, so this article does not draw conclusions about more recent years.

What it will take

The data show the pattern but not the remedy, and all figures here are national-accounts estimates that are revised over time, so the direction matters more than any single decimal. The following options are priorities for evidence and policy, not proven fixes:

  • Diagnose the investment fall. Firm surveys and the government’s own investment data should establish whether private investment, public investment or both drove the 2025 decline, and why.
  • Restore price stability. Inflation above 8% for three consecutive years squeezes the household savings that fund investment; credible disinflation is a precondition for recovery.
  • Raise domestic revenue. With tax revenue near 7.6% of GDP in the latest WDI year, there is little room to fund public investment in infrastructure and skills without broadening the tax base.
  • Make the country easier to invest in. FDI at 0.39% of GDP, behind most regional peers, suggests that investor-facing reforms such as predictable regulation, power and gas supply, and trade policy should be benchmarked against peers that attract more.
  • Publish timely data. Tax revenue and several investment series lag by years in international databases. Faster releases would let policymakers act on trends rather than discover them.

Endnotes

  1. World Bank and OECD national accounts, from Bangladesh Bureau of Statistics, GDP growth (annual %), via World Bank WDI (NY.GDP.MKTP.KD.ZG), 2012–2025. ↩ ↩2 ↩3 ↩4

  2. World Bank and OECD national accounts, Gross capital formation (% of GDP), via World Bank WDI (NE.GDI.TOTL.ZS), 2012–2025. ↩ ↩2 ↩3 ↩4

  3. World Bank and OECD national accounts, GDP per capita growth (annual %), via World Bank WDI (NY.GDP.PCAP.KD.ZG), 2019 and 2025. ↩

  4. International Monetary Fund, International Financial Statistics, Inflation, consumer prices (annual %), via World Bank WDI (FP.CPI.TOTL.ZG), 2019, 2024 and 2025. ↩

  5. World Bank and OECD national accounts, Gross domestic savings (% of GDP), via World Bank WDI (NY.GDS.TOTL.ZS), 2012–2025. ↩ ↩2

  6. World Bank and OECD national accounts, Households and NPISHs final consumption expenditure (% of GDP), via World Bank WDI (NE.CON.PRVT.ZS), 2016 and 2019–2025. ↩

  7. World Bank staff estimates based on IMF balance of payments data, Personal remittances, received (% of GDP), via World Bank WDI (BX.TRF.PWKR.DT.GD.ZS), 2019 and 2025. ↩

  8. IMF balance of payments statistics and World Bank GDP estimates, Foreign direct investment, net inflows (% of GDP), via World Bank WDI (BX.KLT.DINV.WD.GD.ZS), Bangladesh 2012–2025 and comparators 2025. ↩ ↩2 ↩3 ↩4

  9. World Bank and OECD national accounts, Gross fixed capital formation (% of GDP), via World Bank WDI (NE.GDI.FTOT.ZS), 2015 and 2025. For Bangladesh this series is identical to gross capital formation (note 2). ↩ ↩2

  10. IMF Government Finance Statistics, Tax revenue (% of GDP), via World Bank WDI (GC.TAX.TOTL.GD.ZS), 2012 and 2021. ↩