Bangladesh had $3.48bn foreign direct investment in 2022

Foreign direct investment (FDI) in Bangladesh went up by 20.16% to $3.48 billion in 2022, according to a UN agency report.

In 2021, the FDI flows were $2.89 billion.

Outward FDI from Bangladesh, however, declined by 42.7% to $53 million in 2022 against $92 million in 2021, according to the World Investment Report 2023 of the United Nations Conference on Trade and Development (Unctad) published on July 5.

In South Asia, FDI flows to India rose by 10% to $49 billion as the country became the third-largest host country in terms of green field project announcements and the second-largest for international project finance deals. FDI in Bangladesh grew by 20% to $3.5 billion, read the report.

FDI in least developed countries (LDCs) declined by 16% to $22 billion in 2022, according to the Unctad report.

The top five FDI recipient countries are Ethiopia, Cambodia, Bangladesh, Senegal and Mozambique, accounting for about 70% of the total.

In international project finance the top recipients are Cambodia, Niger, the Lao People’s Democratic Republic, the United Republic of Tanzania and Sudan.

For Greenfield projects the top recipients were the United Republic of Tanzania, Bangladesh, Senegal, Cambodia and Rwanda.

Bangladesh also enacted the Bangladesh Patents Bill 2022, which extended the duration of patent protection from 16 to 20 years.

A number of developing economies, including Bangladesh, China, Egypt, India and Malaysia, also introduced measures requiring financial institutions and companies to report on sustainability, including carbon emissions, it added.

However, disclosure measures at the product level remained rare in 2022.

FDI in developing countries in Asia remained flat at $662 billion in 2022, about half of global inflows.

Inflows were highly concentrated in five economies–China, Singapore, Hong Kong (China), India and the United Arab Emirates and in that order accounted for almost 80% of FDI in the region.

The report shows that global FDI declined by 12% in 2022 to $1.3 trillion, after a strong rebound in 2021 following the steep drop induced by Covid-19 in 2020.

The decline was mainly a result of lower volumes of financial flows and transactions in developed countries. The slowdown was driven by overlapping crises: the war in Ukraine, high food and energy prices and debt pressures.

The fall in FDI flows was mostly caused by financial transactions of multinational enterprises in developed economies, where FDI fell by 37% to $378 billion.

The global environment for international business and cross-border investment remains challenging in 2023, the report said.

The Unctad expected the downward pressure on global FDI to continue in 2023.