The investment climate in the country is in shambles; and for years the efforts by the authorities have not yielded noticeable positive results. In the recently announced data by the central bank, FDI in Pakistan in March-24 stood at $258 million, showing a growth of 51 percent year-on-year – highest since June-22 net inflows of $271 million. However, celebrating it makes little sense as the country’s net FDI has remained in close bounds - not rising beyond that – over the past three years. Not to mention that these three years – and even the years before that – have never seen a significant spike in FDI.
The comparison on a month-on-month basis reveals that foreign direct investment was up by 96 percent from $131 million in February-24. Overall, the nine-month tally (9MFY24) for net FDI stood around $1 billion, down by 9.7 percent year-on-year – where inflows were down by 3 percent and outflows up by 8 percent year-on-year.
A look at the country-wise breakup shows that even though China has been occupying the largest share in the country FDI, the net flows from China during 9MFY24 have fallen by 53 percent year-on-year. The decline in power sector FDI also mirrors this trend where the net inflows that continue to lead the total tally are down by 37.6 percent year-on-year in 9MFY24.
Other important sectors – the communication and the financial business sector have also not been impressive in 9MFY24 where the communication sector continues to remain in net outflow and the financial business bet FDI fell by 33 percent year-on-year during the period. The only key sector that posted growth in 9MFY24 was the oil and gas sector where the net FDI was up by around 70 percent year-on-year.
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