The country’s foreign direct investment (FDI) witnessed a rapid growth despite all economic indices stumbling amid a global crisis, thanks to a stable political environment, experts said.
The FDI increased by about 28 percent to stand at $1.16 billion in the first quarter (Q1) in the current fiscal year 2022-23 over the same period of previous fiscal, according to Bangladesh Bank latest foreign investment update.
During July-September in the fiscal 2021-22, Bangladesh received $907 million of the FDI.
Economists said the pace of foreign investment is still quite good even though the main indicators of the economy such as export earnings, remittances, reserves have stumbled due to the crisis.
They said a stable political environment prevailed in the country for a long time which created a favorable environment for investment.
Padma Bridge has already been opened, they said, adding that metrorail in the capital and Bangabandhu Tunnel in Chattogram will be operational by December, all this had a positive impact on foreign investment.
According to data from the central bank, net FDI increased by about 22 percent to stand at $467 million during July-September this fiscal over that in the same period of the previous fiscal amounting to $375 million.
In the last fiscal year 2021-22, a total of $4.71 billion FDI came into the country, which was 39 percent more than that in the previous year (2020-21).
Net FDI increased even more, by 61 percent. The net FDI in the last financial year was $2.18 billion.
Before that, Bangladesh received FDI of $3.38 billion in the fiscal year 2020-21 while net FDI came in at $1.35 billion.
Ahsan H Mansur, Policy Research Institute Executive Director, said, “Domestic and foreign investment depend on many things. If investment in the country does not increase, foreign investment does not come. Satisfactory reserve should be maintained. An investment-friendly environment and government policy support are required.”
He said, “Investment in the country has been stuck in the same place for quite some time. The volatility in the dollar market continues. It is true that an atmosphere of investment was created in the country around several major projects including the Padma Bridge. But the shock of the war has turned everything upside down.”
Even though the export income has been good for so long, suddenly it has started to decrease, he mentioned. Remittances and reserves are falling, he added.
Meanwhile, after two and a half years of the corona pandemic, when there were many disappointments and fears about the economy that was again turned upside down by the Russia-Ukraine war.
Economists said this foreign investment was a sign of relief during the global crisis.
They expressed hope that domestic and foreign investment will increase in the coming days due to several special economic zones and mega infrastructures including Padma Bridge, Metrorail, Bangabandhu Tunnel.