FDI in IT / Telecom Sector During 2015-16 Declines

Foreign Direct Investment (FDI) nosedived in Information Technology sector with a $15.84 million decline in the first eleven months (July-May) of 2015-16 on a year-on-year basis, revealed State Bank of Pakistan (SBP).

However the overall communications sector comprising (telecommunication, information technology and postal & courier services) registered $55.7 million net FDI with $155.8 million inflow and $100.1 million outflow.

According to the SBP data the overall FDI posted an increase of 10 percent during the first eleven months of this fiscal year (FY16) and the country has fetched an overall FDI amounting to $1.084 billion during July-May of fiscal year 2015-16 compared to $980 million in same period of last fiscal year (FY15), depicting an increase of 10.5 percent or $103.3 million.

According to statistics, $13.5 million inflow and $29.3 million outflow was registered in information technology sector during July-May (2015-16). Net FDI in software development remained at $4.5 million and in hardware development it measured at $1.3 million.

On other hand, FDI inflows for IT services remained at $7.7 million and outflow at $29.3 million thus registering negative $21.6 million investment.

According to SBP during the period under review, portfolio investment witnessed downward trend and declined by 144 percent. Portfolio investment stood negative $381 million in July-May of this fiscal year compared to $875 million investment in corresponding period of last fiscal year, showing a decline of $1.256 billion.

Month on Month basis, FDI registered an increase of 292 percent to $64.3 million in May 2016 compared to $16.4 million in May 2015.

During May 2016, FDI inflows were $97 million as against outflow of $32.6 million. Similarly, net foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment, declined 76 percent to $683 million end of May 2016 down from $2.737 billion in same period of last fiscal year.

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