Bangladesh, like other countries in the world, had to suffer from the outbreak of COVID-19 in 2020. Which was reflected in the flow of foreign direct investment or FDI. Compared to 2019, FDI inflow decreased by about 11%. In 2021, it has been possible to overcome this downward trend. In 2021, FDI inflow has increased by about 13%. According to Bangladesh Bank’s statistics, the country’s FDI inflow has returned to the pre-COVID state.
Bangladesh Bank publishes data on the nature and pace of FDI inflows based on financial surveys brought to Bangladesh by foreign investors using banking channels. In this case, the central bank calculates the FDI inflows in three parts: equity capital, reinvested earnings, and intercompany loans.
Bangladesh Bank’s updated statistics on FDI inflows show that investors’ equity capital has played a major role in increasing the FDI inflows of foreign investors in 2021. The amount was 113 crores and 87 lac dollars. In 2020, the equity capital flow was 84 crores and 22 lac dollars. As a result, FDI inflows of foreign investors have increased by more than 40% in 2021.
The re-investment flow from the income of foreign investors in 2021 was 156 crores and 22 lac dollars. In 2020, this amount was 15 crores and 51 lac dollars. As a result, reinvestment from the income of foreign investors has decreased by 0.24%.
In 2021, the inter-institutional debt of foreign investors in Bangladesh stood at 19 crores and 45 lac dollars. In 2020, this amount was 15 crores and 51 lac dollars. As a result, the flow of inter-institutional loans from foreign investors increased by 25% last year.
The net amount of FDI inflow into the country in 2021, including own capital, reinvestment of income, and inter-institutional loans, was 289 crores and 55 lac dollars. Compared to 2020, this is 12.9% more. At the end of 2019, the net FDI inflow of that year was 289 crores and 39 lac dollars. These figures show that the country’s FDI inflow has declined in 2020 and returned to normal in 2021.
The sectors from which the FDI inflow has increased in 2021 are also clear in the statistics of the Bangladesh Bank. The company’s sector-wise gross FDI figures show that the highest inflow was from the textile and garments sector. The next most significant sectors were electricity, banking, gas and petroleum, non-bank financial institutions, telecommunications, trading, food, construction, leather, and leather products.
The United States is first on the list of countries from which Bangladesh had the highest FDI inflow in 2021. The second highest source of FDI inflow was China. Other notable countries for FDI inflow are Singapore, South Korea, United Kingdom, Hong Kong, Netherlands, India, Norway, Sri Lanka, Japan, British Virgin Islands, United Arab Emirates, Malaysia, and Mauritius.
