FDI Records a Sharp Decline as Inflows From China Decline

The foreign direct investment (FDI) for July 2021 showed a sharp decline of 38.7 percent as compared to July 2020.

According to the data released by the State Bank of Pakistan (SBP), only $90 million was received in FDI during the month of July 2021, down from $128.7 million inflows recorded in July 2020.

The first month of the new fiscal year (FY2021-22) continues on the declining trend that was noticed during the last few months of the previous fiscal year.


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Notably, the FDI inflows from China were significantly lower. Last year, Pakistan received $44.1 million from China, but this year’s inflows were a mere $6.6 million. China has been the largest contributor to Pakistan’s FDI for several years, and this year’s low inflows are the major reason for the overall decline in the FDI, considering that the FDI inflows from countries like Singapore and Hong Kong showed several times over increase.

Singapore contributed $16.6 million in July 2021, up from $3.2 million in July last year; and inflows from Hong Kong amounted to $13.2 million, up from $4.6 million last year.

However, the FDI from the UAE showed a significant decline from $27.6 million last July to $6.6 million in July this year.


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A comparison of inflows and outflows shows that inflows from the USA and the UK for July 2021 stood at $14.1 million and $8.5 million respectively, and the outflows amounted to $39.2 million and $20.7 million respectively.

The total foreign private investment (FPI) increased by 60 percent in July 2021 primarily because of a low foreign portfolio investment outflow. The FPI increased from $55.5 million in July 2020 to $88.8 million in July 2021.

The outflow of portfolio investment fell drastically at the same time, from $73.2 million in July last year to just $1.1 million this July.