Foreign Direct Investment Plummets 25% to $1.45 Billion in FY23

Foreign Direct Investment (FDI) has shrunk by 25 percent year-on-year (YoY) in the fiscal year 2022-23 (FY23) amid persistent economic uncertainty.

Pakistan pulled in $1.456 billion during July-June 2023, $480 million lower compared to $1.936 billion in FY22, according to data released by the State Bank of Pakistan on Tuesday.

Meanwhile, FDI is down 58 percent YoY to $114 million in June 2023 against $271 million in June 2022.

Country witnessed a net foreign inflow of USD 114mn during Jun’23, down by 58% YoY

Net foreign direct investment settled at USD 114mn in Jun’23 (-58% YoY), compared to net inflow of USD 271mn during Jun’22. During FY23, net FDI down by 25% YoY to USD 1,456mn compared to USD… pic.twitter.com/aPENcCHyiF

— Arif Habib Limited (@ArifHabibLtd) July 18, 2023

FDI inflows witnessed a 21 percent decline to $2.13 billion, while outflows were also down by 11 percent to $676 million.

China emerged as the single largest investor by country, with $432 million poured into Pakistan in FY23. According to SBP data, Japan came in second with $183 million, followed by the UAE with $180 million and Switzerland $134 million.

Sector-wise data reveals the power sector attracted $623 million. This was followed by the Financial Business sector, which invested $275 million, and the Oil & Gas Exploration sector, which invested $135 million.

The Beverages sector saw a $69 million investment in the 12 months of the fiscal year compared to withdrawals of $18 million last year.