Foreign fund inflows into Bangladesh’s corporate sector have witnessed a marked decline, raising concerns among economists and market observers. Short-term external borrowing by the private sector stood at just $9.80 billion by November 2025, reflecting a sustained contraction in corporate appetite for overseas funds. Analysts warn that this downward trend mirrors a cautious approach among businesses and signals broader economic uncertainties.
According to data from Bangladesh Bank, short-term corporate foreign loans have been decreasing steadily since mid-2023. In May 2023, private sector short-term loans amounted to $13.95 billion, which fell to $10.13 billion by March 2025 and ultimately reached $9.80 billion in November 2025.
Short-Term Corporate Foreign Loans Over Time
| Month / Year | Short-Term Foreign Loans (Billion USD) |
|---|---|
| May 2023 | 13.95 |
| Jan 2025 | 9.80 |
| Mar 2025 | 10.13 |
| Jun 2025 | 10.22 |
| Nov 2025 | 9.80 |
| Dec 2025* | 9.85 |
*Projected
Several factors have contributed to the decline. Persistent power shortages in industrial regions, depreciation of the Bangladeshi Taka, and heightened political and economic uncertainty following the August 2024 changes in government have constrained private-sector borrowing from abroad.
In terms of lending countries, the United Arab Emirates tops the list, with private sector short-term loans of $1.71 billion, 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 foreign borrowing could ease some pressure on the country’s foreign currency reserves. However, record-high remittance inflows have already provided substantial support to the foreign currency stock.”
Anowar-ul Alam Chowdhury, President of the Bangladesh Chamber of Industries (BCI), remarked, “Persistent energy shortages, law and order concerns, and high interest rates have made it difficult for businesses to maintain even half of their productivity. In this context, the reduction in foreign loans is not surprising.”
Economists caution that while the decline in short-term corporate borrowing may temporarily relieve balance-of-payment pressures, prolonged contraction in foreign fund inflows could hinder private sector-led economic growth. This is especially concerning at a time when domestic investment remains critical for sustaining economic recovery.