With the ongoing political unrest between USA and Pakistan, investment inflows from the former continue to come in Pakistan. Investments from the US remained the second highest at $530 million after China, which retains its top position with inflows of $972 million.
According to statistics from State Bank of Pakistan (SBP), contribution of USA based investors was high in foreign portfolio investment with a value of $466 million along with investment in real sector of around $63.5 million, during the period of July to December 2017.
On the contrary, investment inflows from China were largely focused on sectors such as energy and infrastructure, at around $969 million, during the first half of financial year 2017-18. The share of portfolio investment was merely $3.2 million during the same period.
Foreign Portfolio Investment (FPI) is made in equity and debt securities, and is a major component of net Foreign Direct Investment. On the other hand, Foreign Direct Investment (FDI) is carried out in real sector with long-term impact on economy and industries of the country.
Countries and Sector with Significant Net FDI
Besides China and USA, major contributors to the net FDI are Malaysia with $117 million, Hungary with $48 million and Netherlands with $30 million, respectively, during the first half of financial year 2017-18.
Sectors that witnessed investment inflows are: power with $535 million, construction with $349 million and oil/gas exploration and production with $104 million.
Net FDI Records 71% Growth in Jul-Dec
The net FDI witnessed a substantial growth of 71 percent in the period of July to December 2017, which is the first half of financial year 2017-18. Over all, the country received a net FDI of $3.7 billion between July to December as compared to $2.16 billion net FDI reported in the same period of last financial year.
The growth in net FDI was witnessed due to significant inflows in FPI which surged to $2.45 billion after the government floated foreign bonds in the international market.
FDI recorded a slight decline to stand at $1.38 billion during the first half of financial year 2017-18.