Foreign Investment in Pakistan Increases by 162%

State Bank of Pakistan (SBP) reported on Wednesday that the foreign direct investment (FDI) increased 163 per cent to $222.6 million in July this year compared to the same time period last year. FDI began to increase swiftly in the second half of preceding fiscal year and continued to maintain the upward trend. It grew 4.6% in 2016-17.

The highest amount received was $2.4 billion in 2016-17 since the present government took over. FDI was $1.45 billion in 2012-13.

Main Contributors to FDI

  • The maximum contribution to the net inflows has been made by China, which has been investing heavily under China-Pakistan Economic Corridor (CPEC).
  • Malaysia and China were the biggest foreign investors in July.
  • The highest contribution was from Malaysia which invested $72.7 million.
  • China invested $72.7 million in the same month.
  • United Arab Emirates and Japan invested $16.2 million and $12.2 million respectively.

Main Sectors for Investment

  • Trade emerged as the most attractive avenue for foreign investors who contributed $93.9 million in July to this sector.
  • The power sector also attracted investors and received $56.5 million, mainly for the coal projects.
  • The construction sector received $20 million in July against $1.4 million a year ago regardless of the political turmoil.
  • Foreign portfolio investment observed a net outflow of $11.4 million in July. Even though, this sector received $100.5 million from United States and $3.7 million from China.

Moreover, Pakistan also faced setbacks due to heavy withdrawals by many countries which resulted in high net outflows. The highest withdrawal was from Hong Kong ($36.2 million) seconded by Luxemburg ($21.9 million) and the United Kingdom ($17.8 million).