Private sector investment declined significantly in the outgoing fiscal year, according to the Bangladesh Economic Review for 2007. Registration of private sector investment projects at the Board of Investment reduced by 24 per cent, from the previous fiscal year, 2006-07. ‘The drop was mainly due to major reductions in foreign and joint venture investments, local investments however have increased by 37.7 per cent,’ according to the Review, a government document published annually.

During the July-February period, of the outgoing fiscal year, some 1,516 projects worth Tk 25,239 crore were registered with the BoI. Of them, local investors registered 1,386 projects worth Tk 15,853 crore. Foreign investors registered the other 130 projects worth a total of Tk 9,385. During the FY 2005-06 some 1,889-investment projects worth Tk 43,356 crore were registered with the BoI. Of them Tk 24,986 crore were made by foreign investors and Tk 18,370 crore by local investors.

The private sector downturn was primarily due to a fall in foreign investments. There was a reduction of Tk 15,601 crore, for the first eight months, of the outgoing fiscal compared to the same period the previous year. The government has identified political uncertainty in the later half of last year and hesitancy in adopting big foreign investment proposals for the decline.

Breakdowns of domestic private sector investment proposals for the July-February period of 2006-07 were supplied by the Review; textile sector stood at 70.23 per cent, followed by 8.01 per cent in chemicals and 7.73 per cent in the service sector. The foreign investment breakdown stood at a staggering 85.65 per cent in the service sector and 7.89 per cent for the textile sector.