FDI Inflows to Bangladesh Fall 8.8% YoY in FY24; Outward FDI at $81 Million

Foreign direct investment (FDI) inflows in Bangladesh experienced a notable decline of 8.8 percent year-on-year (YoY) during the fiscal year 2023-2024 (FY24), totaling approximately $1.47 billion according to recent statistics from Bangladesh Bank. This downturn is accompanied by a 5.98 percent decrease in net equity capital inflows, a crucial component of FDI, which fell to around $667.5 million compared to $709.93 million the previous fiscal year. These figures reflect a reduction in investor confidence and may hint at diminished expansion plans among foreign enterprises.

In the realm of outward FDI, Bangladeshi firms allocated $81 million, with India receiving a significant portion—about 39 percent—translating to an investment of $31.51 million. In contrast, the United Arab Emirates was the second-largest destination for outward investments, attracting $10.81 million from Bangladesh, which led to a net outflow of approximately $10.79 million.

Despite the recent contraction in new FDI inflows, Bangladesh’s FDI stock saw slight growth, reaching around $17.54 billion by June 2024, reflecting a modest increase of 1.49 percent YoY. This suggests that while new investments are slowing, existing foreign investments remain relatively stable. The outflow figures reveal that, after accounting for a small inflow of $4.86 million from India, the net outflow to India was approximately $26.65 million.

As it stands, India and the UAE collectively account for over half of Bangladesh’s total outward FDI in FY24. The decline in FDI inflows underscores the challenges facing Bangladesh in attracting foreign investments, but the steady FDI stock indicates a resilience in existing investments within the country.