Direct foreign investment in Bangladesh declines by 8.8%

Bankers cite political uncertainty and currency issues as factors behind the decline

Direct foreign investment in Bangladesh has fallen by 8.80 percent in FY 2023-24 compared to the previous year.

The Bangladesh Bank's report published on Wednesday highlights that net foreign investment reached $1.47 billion, down from $1.61 billion at the end of FY 2022-23.

This indicates a decrease of $142 million over the year.

Net investment is the amount remaining after deducting repayments of previous investments from the total foreign investments received during that period.

According to the report, the textile sector attracted the most investment, followed by banking, pharmaceuticals, and energy.

Economists and bankers say the economy has been facing multiple crises over the past few years, resulting in a decline in foreign investment for several reasons.

Standard Chartered Bank's Chief Executive Officer, or CEO, Naser Ejaz Bijoy pointed to several factors contributing to the decrease.

"Foreign investment has decreased this year due to the elections [12th general election]. Political conditions in the country deteriorate before and after the elections, and foreign investors observe these factors," he told bdnews24.com.

The dollar crisis that began in mid-2022 and the depreciation of the Bangladeshi taka have also affected investment sentiments.

“Foreign investors consider whether they will be able to recover their investments,” CEO Naser said.

The banking sector's negative outlook has further diminished investor confidence.

"International rating agencies have downgraded our banking sector's creditworthiness, which has reduced our credit lines with foreign banks," said the banker.