Foreign Direct Investment Falls 5% in 11 Months of FY22

A majority of foreign investors and multinational companies remain cautious about making investments in Pakistan during the prevailing situation which depicted the downward trend of foreign direct investment (FDI) showing a drop of 5 percent year-on-year (YoY) during the period July to May for the financial year 2021-22.

According to the data released by the State Bank of Pakistan (SBP), the FDI has decreased to $1.597 billion from $1.67 billion compared to the same period of the last financial year.

FDI during May 2022 saw a net inflow of $141 million compared to a net inflow of $199 million during May 21, down by 29 percent YoY. In April 2022, the FDI saw a net inflow of $171 million compared to a net inflow of $169 million during the same month of the last year.

China remained the largest investor with a net FDI of $373 million during 11MFY22 compared with $720 million during the same period last year.

United States remained the second-largest investor with a net FDI of $241 million during 11MFY22 compared with $122 million during the same period last year.

During 11MFY22, a major investment was poured into the Power sector ($567 million) followed by Financial Business Sector ($373 million) and Oil and Gas Exploration ($188 million).

During the period, the foreign portfolio investment saw a dismal trend also. The investment from the equity market showed an outflow of $377 million during the said period. The investment under debt securities stood at $367 million from July to May FY22 as against $2.4 billion reported during the same period last year.

Overall, the foreign investment showed a dip in inflows by 58.8 percent which stood at $1.58 billion from July to May FY22 as against $3.85 billion during the same period.