Foreign direct investment (FDI) in the country rose by 39% to $4.7 billion in fiscal year 2021-22 compared with that of $3.38 billion in the previous fiscal.
In FY22, net FDI inflow also increased by 61% to $2.17 billion against $1.35 billion in FY21, according to Bangladesh Bank data.
Businesses said that FDI increased in the past fiscal year as the global economic activities started returning to normalcy after the pandemic.
The fast economic recovery of the country from the pandemic also encouraged the foreign investors to go for new investments in the country, they said.
They, however, feared that the trend might reverse due to the economic worries Bangladesh and the other countries were facing now.
Global inflation, supply chain disruptions and the Russia-Ukraine war might disrupt the growth of FDI in the country in the coming days, they added.
They said soaring transport costs due to a hike in fuel oil prices, fuel and electricity shortages, and significant devaluation of the local currency taka could be a heavy drag on the FDI inflow.
Bangladesh’s economy reached $416 billion in FY22 that displayed its potential to the foreigners.
The gross FDI was $3.23 billion while the net FDI was $1.27 billion in FY20.
But in FY19, the gross FDI was $5 billion and the net FDI was $2.63 billion amid acquisition of Akij’s tobacco business by Japan Tobacco.
The private sector credit growth in Bangladesh accelerated to a four-year high of 13.66% in the past financial year compared with that in the preceding year.
The United States in its report on the Investment Climate Statement Chapter of the Country Commercial Guide released on July 28 said that corruption, a limited number of financing instruments, bureaucratic delays and lax enforcement of labour laws continued to hinder foreign investments in Bangladesh.
The report said that the government's efforts to improve the business environment in recent years showed promise but implementation was yet to materialize.