Pakistan’s Net FDI Grows By 99% in FY18

Pakistan’s net Foreign Direct Investment (FDI) showed a growth of 99 percent in the financial year 2017-18 when compared with the previous financial year, on the basis of stable investments inflows in the real sector and foreign receipts through debt securities.

According to statistics provided by the State Bank of Pakistan, the net FDI received stands at $4.97 billion by the end of FY18 as compared with $2.49 billion inflows recorded in FY17.

Breakup of the net FDI revealed that the investment inflows showed almost a flat growth of 0.8 percent (a $20 million increase) year-on-year standing at $2.76 billion. On the other hand, inflows through Foreign Portfolio Investment (FPI) mainly through debt securities attracted inflows of $2.45 billion.

Direct Investment

Direct investment made by foreign corporations and conglomerates from different countries stood at $2.76 billion in FY18.

China is the major contributor throughout the closing financial year, with investment inflows increased to $ 1.585 billion as compared with $1.26 billion reported in FY17. Of course, the investment inflows were meant for mega projects in the country being developed under the China Pakistan Economic Corridor (CPEC).

Here are the other countries who contributed to the rise in FDI in Pakistan:

  • UK is the second biggest contributor of FDI with $278 million in FY18.
  • Hong Kong with $140 million FDI;
  • Malaysia with $127 million FDI;
  • and USA with $92 million FDI.

Sectors that received major investments included:

  • Power sector with $885 million;
  • Construction sector with $707 million;
  • Financial business with $276 million;
  • Oil and Gas Exploration with  $194 million

Portfolio Investment

Foreign Portfolio Investment (FPI) under debt securities attracted an amount of $2.45 billion as a result of floating of Eurobonds and Sukuk by the then government of Pakistan in December 2017 with the total value of $2.5 billion.

FPI’s other head includes Equity Securities or investment in the stock exchange which saw an outflow of $240 million in FY18 due to the bearish trend witnessed recently. The benchmark index dropped to a record level in the said financial year and foreign investors pulled out their capital amid uncertain economic and political scenario of the country.

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