FDI Flow Into Bangladesh Jumps 22.52%

Economy

FDI Flow Into Bangladesh Jumps 22.52%

- FDI into Bangladesh jumped 22.52% to US$ 2.45 billion (Dh9 billion) in 2016-17 fiscal year

- Bangladesh is the world's 32nd largest economy with US$ 687.14 billion Gross Domestic (GDP) based on Purchasing Power Parity (PPP)

- Bangladesh seeks investment in 100 new economic zones where UAE investors could invest and own 100% export-oriented industries and benefit from duty-free quota access to Europe and the United States

An attractive investment climate and a higher return on investment has led to a 22.52% jump in Foreign Direct Investment (FDI) in Bangladesh to US$ 2.45 billion in 2016-17 financial year, up from US$ 2 billion in 2015-16. This is encouraging a number of UAE businesses to invest in Bangladesh, according to the country's central bank.

Bangladesh economy will grow by 8.25% in the current fiscal year, Bangladesh Planning Minister AHM Mustafa Kamal said. “We expect that the GDP growth rate will exceed the target of 7.8% and will increase to 9% in the next five years," he added.

With Gross Domestic (GDP) of US$ 687.14 billion on Purchasing Power Parity (PPP) basis, Bangladesh is the world's 32nd largest economy, according to the International Monetary Fund (IMF), almost similar in size to the economy of the UAE, the 33rd largest in the world with US$ 686.83 billion GDP on PPP basis.

Standard & Poor's credit rating for Bangladesh stands at BB- with stable outlook. Moody's credit rating for Bangladesh was last set at Ba3 with stable outlook. The country has diversified away from an agrarian to a more manufacturing-based economy with rapid growth in the readymade garment industry.

With one of the most cost-effective labour markets, perhaps the lowest cost of starting a business, backed with a very low cost of land, Bangladesh offers one of the best but under-rated investment destinations in the world.

Muhammad Imran, Bangladesh Ambassador to the UAE, said, "We have witnessed a growing interest among both Emirati businesses to invest in Bangladesh while a large number of Bangladeshi entrepreneurs are also setting up companies in the UAE, therefore strengthening the two-way economic ties between the two countries. Our government has announced the establishment of 100 economic zones, where foreigners, including our Emirati brothers could invest in 100% foreign-owned export-orient industries and benefit from lower cost of licensing, land and production and benefit from higher margins and duty-free export quota access to a number of countries in the world."

He was speaking at the inaugural Bangladesh Economic Forum at Swissotel Al Ghurair, attended by more than 200 delegates, investors, businessmen, bankers and investment advisors, organised by Pan Asian Group, a Dubai-based company. A number of UAE businesses, including Malabar Gold and Diamonds and Vahedna Group as well Aydin Group are investing in Bangladesh economy, organisers said.

"Our bilateral relation with the UAE is underpinned by the presence of a large Non-Resident Bangladeshi (NRB) community base with more than 50,000 businesses owned by Bangladeshi expatriates," Muhammad Imran said.

Digital Bangladesh

More than 152.52 million among Bangladesh's 161 million people use cell phones, according to the statistics issued by Bangladesh Telecommunications Regulatory Commission (BTRC) in July 2018, raising the mobile penetration rate to 94.73%. Internet subscriber base has reached 88.68 million in July 2018, or 55.08% of the country's population currently have access to the Internet. According to the latest statistics by BKash a digital payments platform 28.8 million users made BTK2.17 trillion (US$ 25.91 billion) payments through 1.57 billion transactions in 2017. Bkash projects 47.8 million, or nearly 30% of Bangladesh's population will make BTK 2.68 trillion (US$ 32.05 billion) payments through 1.88 billion transactions a year using BKash digital payment channel by December 2018. B Kash, which has 31.9 million users, expects its subscriber base to cross 47.8 million by December 2018 making it the fastest growing payment channels in the world.