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Bangladesh - October 19, 2023

Foreign investment outflows increased more than inflows

2022-23 fiscal year

Mahfuz Emran: Despite the ongoing dollar crisis in the country, foreign investment (FDI) could not give good news. The total FDI in 2022-23 is less than 40 percent compared to the previous fiscal year. Mainly due to global instability, the economy of the country faced the crisis in 2022. Besides, the withdrawal of foreign investment from Bangladesh has also increased. As a result, there has been a negative growth in net investment in the financial year 2022-23.
According to the report, the gross investment last financial year was $4.438 billion, which was $4.636 billion in the previous financial year. That is, the gross investment has decreased by 4.27 percent in one year. The UK, South Korea, Hong Kong and the Netherlands were among the top countries in total FDI in 2022-23.
On the other hand, $1.243 billion was taken back in the last financial year. In the previous financial year, it was $1.196 billion. That is, the withdrawal of investment has increased by 3.93 percent in one year. At this time, South Korea, China, Hong Kong and Singapore withdrew the most investments.
According to the report, the country that invested the most in Bangladesh in the last financial year was UK. Its amount was $622 million. However, the country withdrew only $57 million in investment. The country’s net investment is about $565 million. Out of this, there was an investment of $234 million in the banking sector and $187 million in the textile sector.
In the last financial year, the Netherlands was in the second position in terms of net foreign investment in Bangladesh. The country has invested about $513 million. However, the withdrawal of investment was much less, only $77 million. The country’s net investment is $436 million. The Netherlands invested $151 million in the food sector and $102 million in the gas and petroleum sector. However, the second highest investment of $603 million came from South Korea in FY 2022-23. However, during this time, the country has taken back the investment of $308 million from Bangladesh. As a result, the net investment from the country to Bangladesh stood at $295 million in the last financial year. Of this, $160 million came in the textile sector.
In the last financial year, the investment from China was $232 million. Of this, the country has taken back $203 million from Bangladesh. As a result, China’s net investment stood at only $29 million last fiscal year. And last fiscal year, Hong Kong’s investment amount was $371 million. Of this, the country took back $187 million. In this way, the country’s net investment in Bangladesh in the last financial year was $184 million. The country has invested about $117 million in the power sector.
Besides, in the last financial year, Singapore also took back investment. In the financial year 2022-23, the country has invested about $331 million in Bangladesh. At the same time, $139 million in investment was returned. As a result, the country’s net investment stands at $192 million. Singapore has made the highest net investment of $35 million in the power sector.
The US invested $347 million in Bangladesh last fiscal year. And the investment withdrew only $58 million. After withdrawal, the country’s net investment stood at $289 million. Japan invested $107 million, but received back only $28 million in the last financial year. The net investment is $79 million.
Similarly, India, UAE, Malaysia and Norway withdrew investments from Bangladesh in the last financial year. According to the report of Bangladesh Bank, India’s investment in Bangladesh in the last financial year was about $142 million. Of this, $22 million were withdrawn. The net investment is 120 million dollars. United Arab Emirates invested $102 million but withdrew $12 million. And in the outgoing financial year, Malaysia took back $6 million against the total investment of $105 million. In addition, Norway’s total investment was $189 million. Of this, the country took back about $5 million.
On the other hand, Malta did not take back any investment in the last financial year. The country invested a total of $171 million in Bangladesh in the fiscal year 2022-23. There is no change in net investment due to no withdrawals.
Bangladesh Bank’s data analysis also shows that the highest investment in the textile sector in the last financial year is $1.229 billion. However, 46 percent of the $567 million was returned. As a result, the net investment in the sector stands at $662 million. Most of it is from the UK and South Korea.
Meanwhile, about $440 million were invested in the power sector, but only $139 million were returned. Net investment stands at $301 million. $403 million were invested in the banking sector, but $36 million were returned. And in the gas and petroleum sector, the investment of $340 million was returned against $14 million. And almost all of the $436 million that came into the telecom sector remained invested. Only $1 million was returned.

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