Amid the ongoing political stability, the government’s various policies to lure investors have cleared the way for the constant surge in the Foreign Direct Investment.
As FDI plays a crucial role for the economic development, all the more attention is needed to ensure better business facilities alongside market diversification to attract more investors, said economists.
According to the latest data, the net inflow of FDI surged by 29 percent during the fourth quarter (October-December) over the amount received in the previous quarter (July-September).
The figures were $657.32 million in October-December in 2017 and $507.15 million in July-September in 2017.
The country received $2.15 billion in FDI in 2017, which is only 7.76 percent drop from $2.33 billion in 2016.
Bulk of the FDI in 2017 came from the United Kingdom, which was $312.98 million.
It was followed by Singapore at $202.73 million, Norway $194.21 million, South Korea $179.80 million, USA $166.66 million, Hong Kong $143.61 million, India $114.65 million, Netherlands $113.90 million, Malaysia $90.87 million and China at $90.12 million.
On the other hand, the foreign investors mostly betted on textiles and garment sector investing $421.68 million.
It was followed by banks at $278.86 million, telecommunication $229.64 million, power $163.51 million, food $107.27 million, gas and petroleum $96.86 million, computer software and IT $83.55 million, leather and leather products $70.23 million and cement $35.94 million.
Meanwhile, the gross inflow of FDI was recorded at $2.68 billion in 2017, which was $2.82 billion in 2016.
The FDI declined in 2017 due to a central bank divestment and repayment of loans and loss of the multinational entities, said a central bank official.
He said major portion of the FDI came from reinvestment by the existing multinational firms in the country. Some $1.28 billion net FDI came from reinvestment in 2017.
The equity capital, also known as fresh investment, declined to $ 538.90 million in 2017 from $ 911.38 million in 2016.
Economists said the FDI plays a vital role in advancing economic growth, especially in lower and lower middle developing countries.
They said the government should implement investment-friendly policies, simplify regulatory practices, and remove inefficient bureaucratic procedures to lure foreign investors to invest more in the country.
Eminent economist and former BB governor Salehuddin Ahmed told Bangladesh Post that the FDI coming to the country has not yet reached a satisfactory level.
Higher inflow of foreign investments is needed for the country to achieve a sustainable economic growth, he said, adding that the government must focus on raising better business facilities, especially business friendly environment to attract foreign investments.