BanglaPress Desk: Despite global economic uncertainty and geopolitical tensions, Bangladesh has witnessed positive growth in Foreign Direct Investment (FDI) inflows.
In the April-June quarter of this year, net FDI rose by 12.78 percent year-on-year to reach $346.94 million. Reinvested earnings by foreign companies operating in the country were the primary driver of this growth.
'Invest Bangladesh' disclosed this information in a press release on Monday (October 12).
According to the latest Bangladesh Bank report, net reinvested earnings surged by 55.08 percent to $260.91 million during this period. This indicates that foreign investors are choosing to reinvest a significant portion of their profits earned in Bangladesh within the country rather than repatriating them. This move signals confidence in the long-term potential of the Bangladeshi market and reflects the expansion of their existing operations.
However, a slight weakness was observed in new equity capital investment during the same period. Net equity capital stood at $77.42 million in the April-June quarter, marking a 4.77 percent decline compared to the same period last year. Global geopolitical uncertainties, conflicts in the Middle East, and high energy prices are exerting pressure on attracting new investments.
Meanwhile, the net inflow of inter-company loans dropped by 85.17 percent to $8.61 million. Although total inter-company loans amounting to $333.80 million arrived during this period, the net inflow declined due to the repayment of a significant amount of previous loans.
In terms of sectoral breakdown, net FDI in sectors outside Export Processing Zones (EPZs) rose by 20.75 percent to $280.88 million. Conversely, net FDI in economic zones fell by 25.33 percent year-on-year to $4.51 million. However, net investment in this sector stood at only $0.42 million in the previous quarter; thus, the flow of investment into economic zones has increased compared to that period.
Nahian Rahman Rochi, Member (Investment Promotion) of Invest Bangladesh, stated that the rise in net FDI in Bangladesh—despite global economic uncertainty, geopolitical tensions, and high energy prices—is a positive development. However, attracting new equity investment remains challenging as investors exercise caution amidst the current global climate.
He noted a significant increase in reinvested earnings by foreign companies already operating in Bangladesh, describing this as a crucial indicator of their confidence in the country's business environment and long-term prospects. If this trend continues, it could lead to business expansion, enhanced production capacity, and the creation of new employment opportunities.
Nahian Rahman mentioned that efforts are underway to address fundamental issues within the investment climate to attract greater volumes of high-quality foreign investment. Recent announcements of new investments by several major international firms are promising. Simultaneously, Invest Bangladesh is actively working to convert projects worth $1.3 billion—currently in the investment pipeline—into actual investments.
Highlighting the priority placed on developing economic zones and preparing them for investment, he noted that development work on the Chinese Economic and Industrial Zone project—stalled for over a decade—is now progressing. The project is slated for completion by 2028, with potential investments surrounding the zone estimated at around $500 million.
He added that Invest Bangladesh’s 180-day progress report outlines the initiatives undertaken so far, achievements made, and areas requiring further action. Regular updates on progress will continue to be provided in the future. The primary objective now is to translate investor interest into tangible investments, the establishment of new factories, and job creation.
BP/TD
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