According to preliminary statistics from the Bangladesh Bureau of Statistics, the private investment-to-GDP ratio fell by 0.88 percentage points to 23.64% in FY23.
Based on their data, this is the ratio's second drop in three years. It experienced a slight decline in 2020-21 as a result of the effects of Covid-19.
In line with the economy's recovery from the healthcare crisis, the ratio rose 0.82% to 24.52% in 2021-22.
The dollar scarcity has lasted nearly a year since earnings from remittances and exporters did not match an increase in import costs, causing reserves to erode.
As shown in Bangladesh Bank data, the opening of letters of credit for capital machinery fell 56.91% and settlement dropped 16.83% in the July-April period of FY23 compared to the same period the previous fiscal year.
Economists argue that the reduction in private investment is primarily related to decreased company confidence.
The dollar's exchange rate surged last year as a result of the Russia-Ukraine conflict.
In addition, the dollar crisis, high inflation, and global economic uncertainty has businesses hesitant about increasing investment.
BBS recently published a preliminary estimate of GDP growth for the current fiscal year. It shows that GDP increased by 6.03% in the fiscal year 2022-23. This rate was 7.10% in the previous fiscal year.
Economists anticipate that the reduction in private investment will have a negative impact on GDP growth in FY23.
According to preliminary BBS statistics, growth in all three sectors of agriculture, industry, and services fell from the previous fiscal year.
The agricultural industry grew by 3.05% in FY22, but only by 2.61% this year.
Growth in the industrial sector fell from 9.86% to 8.18%, while growth in the service sector fell from 6.26% to 5.84%.
The average per capita income in FY23, according to BBS, is Tk2,70,414. In the preceding fiscal year, the average per capita income was Tk2,41,047.
Meaning that the income in local currency has increased by Tk29,367 in a span of one year but in terms of the dollar, the per capita income of the country's people has decreased.
The average per capita income in FY22 was $2,793. In the current fiscal year, it is $2,765.
That is, per capita income has fallen by $28 year on year.
Typically, private investment remains constant or marginally increases in a fiscal year compared to the previous year.