Foreign direct investment (FDI) contracted by over 7% to $3.2 billion in FY23, according to Bangladesh Bank data released on Tuesday, as the local forex market volatility showed no sign of cooling anytime soon.
Economists renewed their call about the country's pressing need for more foreign exchange, while the reality was that equity investment plummeted notably during the period under review -- dispatching another bad news for the country's already strained economy.
Disinvestment, which is asset sales or liquidation, saw an uptick in FY23, which economists attributed to potential fund withdrawals.
According to Bangladesh Bank's Tuesday report, equity investment plummeted by 40.91%, while intra-company loans fell by 40.14%.
In contrast, reinvestment by existing foreign-owned companies experienced a surge of nearly 16% during the fiscal year under review.
The highest FDI inflow originated from the UK, totalling $622 million in gross inflow, closely followed by the Republic of Korea at $603 million.
Other major contributors include the Netherlands ($512 million), Hong Kong ($371 million), the United States of America ($347.2 million), Singapore ($330.62 million) and China People's Republic ($232 million) during the fiscal year 2022-23.
FDI in Bangladesh primarily focuses on three areas: economic zones (EZ), export processing zones (EPZ) and non-export processing zones (non-EPZ).
In FY2023, non-EPZ areas attracted the highest net FDI inflows, around $2.8 billion, while EPZs received $406 million.
The EZ areas garnered nearly $4.2 million.
The volume of disinvestment stood at $1.2 billion during FY23.