Dhaka, Bangladesh (BBN) – The inflow of foreign direct investment (FDI) grew by nearly 26 per cent with telecommunication sector making highest growth in the last fiscal over that of the previous fiscal.
The flow of net FDI reached $941 million in fiscal 2008-09 (FY09) against $748 million of the previous fiscal, according to the central bank provisional statistics, released on Thursday.
A total of around $430 million was invested in the country’s telecommunication sector, particularly by fast-growing mobile phone companies in FY 09, the central bank officials said.
“We’ve been able to attract a significant amount of FDI in FY09 despite the global economic recession,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in Dhaka.
The flow of FDI may touch $1.0 billion mark again in FY09 after receiving revised data of the FDI, the BB official said, adding that the figure of re-invested earnings by the foreign companies would be included in the revised data of the FDI.
In 2008, the country received investment from overseas sources hit a record $1.09 billion mark, registering a 63 per cent growth from the previous calendar year, according to a BB survey report, released recently.
The sectoral inflow of FDI during the first half of FY09 shows that the infrastructure sector (gas, oil, power and telecommunication) received about 48 per cent of total FDI, trade and commerce sector 18 per cent, manufacturing sector 14 per cent, and services and others sector 20 per cent, the BB’s data showed.
“The flow of FDI may increase in different sectors due mainly to cheap labour cost that is attracting the foreign investors to invest more in Bangladesh,” another BB official said.
Currently, the export processing zones are attracting FDI in different sectors in their own territories, offering special insensitive to foreign investors’, the BB official said quoting latest data of the Bangladesh Export Processing Zones Authority (BEPZA).
The BEPZA is the official organ of the government to promote, attract and facilitate foreign investment in eight Export Processing Zones (EPZs) across the country.
On the other hand, the flow of portfolio investment has recorded a deficit of $159 million in FY09 against $47 million of the previous fiscal due to the global meltdown.
“The portfolio investment dropped in FY09 across the world including South Asian countries due to the global meltdown,” Senior Vice-president of the Dhaka Stock Exchange (DSE) Saiful Islam said.
He also said the portfolio investment accounted for less than 2.0 per cent of the total market capitalization of Bangladesh stock market. “We are hopeful about increase of such investment in the near future as the country was not hit by the global recession.”
BBN/SS/SI/AD-29August09-11:49 pm (BST)