The Foreign Direct Investment (FDI) to Pakistan declined by 30 percent during the first eight months of the current fiscal year (July 2020 to February 2021) and was recorded at $1.3 billion, according to data released by the State Bank of Pakistan (SBP).
The FDI for the same time period in the previous fiscal year had stood at $1.854 billion. On a monthly comparison, the FDI to Pakistan in February 2021 stood at $155.1 million, which is 44 percent less than the FDI recorded for February 2020, and 20 percent less than the FDI recorded for January 2021.
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The data also showed that the FDI inflows from China and Hong Kong had decreased, and those from the Netherlands and the United Kingdom had increased during the eight months of the current fiscal year.
A sector-wise distribution of the FDI shows that the investments of the Telecommunications sector had fallen drastically to only $24 million in the eight months of this fiscal year as compared to an inflow of $451.7 million last year. This may be explained on the basis of the one-time license payments from the telecom operators made last year.
The FDI in financial businesses slightly grew to $196.9 million from $194.7 million in the same time period last year.
The oil and gas explorations sector recorded FDI inflows of $142.0 million in July-February FY2021, which is down from a year earlier when it had brought $205.5 million.
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The FDI for the power sector went up but the rate of the increase of investments declined despite this segment being the largest recipient of investments for the China-Pakistan Economic Corridor (CPEC). This has been attributed to the slowdown in projects related to the power sector. It had fetched $536.7 million from July to February, which was slightly up from $533.1 million a year ago.
Additionally, the investments in energy and infrastructure projects under the CPEC have also slowed down.
