Political unrest in the country, combined with the global economic slowdown, has made Pakistan one of the least preferred destinations for foreign investors, with foreign direct investments (FDI) falling by 59 percent in July-December of the current fiscal year (FY23).
According to data released by the State Bank of Pakistan (SBP), FDI decreased to $461 million in July-December FY23 from $1.1 billion observed last year. The country experienced a net foreign outflow of $17 million during the month of December, compared to $229.8 million in the corresponding period last year.
According to SBP data, the financial sector observed outflows of $572.7 million from global investors between July and December FY2023, compared to inflows of $709.3 million in the same period last fiscal year.
Investment in the oil and gas exploration sector fell to $89.2 million in July-December FY2023, down from $138.9 million the previous year.
Despite being considered a major attraction for net foreign investments, the power sector received $237.1 million in FDI during the period under review, compared to $345.4 million last year. It was followed by financial business that saw net FDIs of $176 million over last year’s much greener $230.3 million, while the Cars (under Transport Equipment) recorded inflows of $20.7 million during the first six months of FY23, compared to $5.8 million in July-December FY22.
Analysts said that investment inflows have been affected due to international and domestic economic and political unrest however once the dust settles, the inflows are likely to come in abundance.
