According to data released by the State Bank of Pakistan (SBP), foreign outflows were $47.3 million in March 2023, compared to $229.4 million in the same period last year. In July-March of the financial year 2022-23, outflows dropped by 16 percent from $684.3 million in 9MFY22 to $574.9 million.
Meanwhile, FDI fell 22.5 percent to $1.048 billion in the first nine months of the current fiscal year (July-March). In the same period of the previous fiscal year, Pakistan reported an FDI of $1.353 billion.
The United States emerged as the single largest investor by country, with $42.5 million poured into Pakistan in March. According to SBP data, China came in second with $32.4 million, followed by Hongkong with $18.6 million, and $11.9 million from Kuwait.
China invested $319 million in FDI from July to March of FY23, making it the country with the highest contribution overall, but less than the $382 million reported during the same period last year.
Japan ($157 million) and Switzerland ($123 million) were the other two countries with significant investments in Pakistan during 9MFY23. Overall, the postponement of the IMF program, ongoing economic and political turmoil, and Pakistan’s growing balance of payments crisis have all undermined investors’ trust in the country.
Sector-wise data for March reveals the power sector attracted inflows of $46.4 million, with $19.6 million going toward coal-based projects. This was followed by the Financial Business sector, which attracted inflows of $28.1 million, and the Personal Services sector, which invested $23.1 million.
Investment in the oil and gas exploration sector fell to $116 million in July-March FY23 from $179 million the previous year. Meanwhile, power sector investment fell from $512 million to $460 million.
Analysts suggest that investment inflows in the 9 months have been affected due to the postponement of the IMF program, ongoing economic and political turmoil, and Pakistan’s growing balance of payments crisis.
black 01842337012