Foreign direct investment (FDI) crossed $1 billion last year, marking a 63 percent rise compared to 2007, mainly because of an increased inflow of such investment to telecom sector.
According to the Bangladesh Bank's latest survey report released on Sunday, the FDI inflow was $1,086.31 million in 2008, which was $666.37 million in the previous year.
The central bank calculates FDI on the basis of three components -- equity capital, reinvestment earning and intra-company loans.
Equity capital comes solely from abroad, while foreign investors reinvest local earnings in intra-company loans and reinvestment earning.
Equity capital shot up by 102 percent in 2008 and stood at $809 million from $401 million in 2007.
Reinvestment earning increased by 15 percent to reach $245 million, while intra-company borrowing fell by 39 percent to $31 million in 2008.
The telecom sector attracted more than half of the total investment. It increased by 219 percent and $641 million was invested in the sector last year. The amount was $202 million in the previous year.
Bangladesh Bank officials said more investment by different oil companies went to energy sector in the last 10 years. But in the recent years the investment was attracted to the telecom sector as the mobile phone companies went for expansion.
Although FDI decreased over the last several years, an Egyptian company made a huge amount of investment in the telecom sector last year.
Country-wise FDI inflow shows that FDI increased by 397 percent from Egypt last year to $373 million, which was the highest from a single country.
In textile sector 23 percent more FDI was recorded in 2008 over 2007 and the amount stood at $126 million.
In banking sector the FDI increased by 78 percent to $141 million, which was $79 million in 2007.
Food sector brought in $22.89 million, while agriculture and fishing $14.43 million.
FDI inflow from countries like the USA and UK went down last year. FDI from the USA fell by 60 percent to $41 million, while 0.05 percent to $130 million from the UK.
FDI from Malaysia increased by 268 percent to $71 million and from Japan by 58 percent to $57 million.
However the outstanding FDI stock in Bangladesh is still more in gas and petroleum sector although the FDI increased in the telecom sector.
In December 2008 the total outstanding FDI stock was $4,817.05 million where the contribution of gas and petroleum sector was $1,203.40 million, telecom $1,045.96 million, textile $925.03 million, banking $728.40 million, power $251.45 million, cement $139.07 million, food products $104.18 million and of fertiliser $103.71 million.