FDI up as most sectors profitable: analyst

Bangladesh saw a spike in foreign direct investment in 2015 as most sectors of the economy were profitable and investor confidence was up, said an analyst yesterday.

The country received a record $2.23 billion in FDI last year, up 44.1 percent year-on-year, according to the World Investment Report 2016 of the United Nations Conference on Trade and Development.

The 2015 FDI receipts put Bangladesh well ahead of all countries in South Asia, except for India, which was the 10th largest FDI recipient country in the world in 2015 with its inflow of $44 billion.

“The spiral in fresh foreign investment shows that investors are interested in the country,” said M Ismail Hossain, professor of economics at North South University, at the unveiling of the report.

The WIR data shows 38 percent of the FDI went to the manufacturing sector, followed by power, gas and petroleum, banking and telecommunication sector.

The textiles and apparel sectors were the main recipients of FDI in the manufacturing sector: they received 13 percent higher FDI at $443 million in 2015.

FDI in power, gas and petroleum soared 10 times to $574 million last year from a year earlier. The sector accounted for one-fourth of total FDI last year, according to WIR 2016.

The UNCTAD data shows that a spiral in reinvested earnings led the growth in FDI inflow in Bangladesh in 2015 from a year earlier.

The reinvestment of earnings or profits by existing foreign firms rose 16 percent year-on-year to $1.14 billion in 2015. The amount of reinvested earnings accounted for 51 percent of the total FDI that Bangladesh received last year.

“Reinvestment of profit signifies confidence of investors in the investment climate of Bangladesh,” said SA Samad, executive chairman of the Board of Investment that unveiled the UNCTAD report.

He said the rate of return in Bangladesh is very high at 14-15 percent.

“That is one of the reasons why foreign firms do not want to quit,” he added.

Also, the inflow of equity investment or fresh FDI surged 149 percent from a year earlier to $696 million in 2015.

Hossain, in his presentation on FDI flows around the world, linked the rising investment to Bangladesh's economic prospects.

The country, which recorded over 6 percent growth in the past decade, is estimated to cross the 7 percent GDP growth barrier this fiscal year.

Samad said Bangladesh's FDI receipts last year was a record high among the least-developed countries.

“But we should not be content,” he said, adding that investment would rise as Bangladesh has signed investment treaties with more than 30 countries.

Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister, said Bangladesh received FDI in its priority areas.

He said India receives high amounts of FDI because the country has a huge market. In Bangladesh, investors will continue to show up as long as the domestic market continues to expand, he added.


২৬ মিনিট আগে|বাণিজ্য

৭ লাখ ৬১ হাজার ৭৮৫ কোটি টাকার প্রস্তাবিত বাজেট পেশ চলছে

প্রস্তাবিত বাজেটে সরকার ৫ লাখ কোটি টাকা রাজস্ব সংগ্রহের লক্ষ্যমাত্রা নিয়েছে, যা গত অর্থবছরের তুলনায় প্রায় ৬৭ হাজার কোটি টাকা বেশি।