Jul-Apr FDI down 3pc to $1.784bn YoY

KARACHI: Foreign Direct Investment (FDI) in Pakistan declined by 3 percent during the first 10 months of the current fiscal year (FY25).

FDI had been on an upward trend for several months, recording a 14 percent increase during the first nine months of FY25. However, the momentum eased slightly in the July–April period, primarily due to lower FDI inflows in April 2025 compared to the same month last year.

According to data released by the State Bank of Pakistan (SBP) on Friday, the country attracted $1.784 billion in FDI during July-April of FY25, compared to $1.836 billion in the same period last fiscal year (FY24), reflecting a decrease of 3 percent or $52 million. During this period, total FDI inflows stood at $2.661 billion, while outflows amounted to $876 million.

On a month-on-month basis, FDI fell sharply by 64 percent in April 2025. SBP data showed that Pakistan received $141 million in FDI in April 2025, compared to $395 million in April 2024, marking a significant decrease of $254 million.

The second component of foreign investment portfolio investment-also saw a significant downturn, recording a 457 percent decline during July-April of FY25. Pakistan witnessed a net portfolio outflow of $290 million during the period, compared to an inflow of $81.2 million in the same period of FY24.

Despite these setbacks, total foreign investment, comprising FDI, portfolio investment, and foreign public investment, registered a 16.5 percent increase. It rose to $1.209 billion during July-April FY25, up from $1.038 billion in the same period of FY24, reflecting an increase of $171 million.

Analysts said that for a cash-strapped economy like Pakistan, sustained foreign investment is crucial to ease pressure on the external account, rebuild declining foreign exchange reserves, and meet external debt obligations.

Month-on-month basis, FDI fell sharply 64 percent in April 2025. According to SBP, some $ 141 million worth FDI was received in April 2025 versus $ 395 million in April 2025, showing a decline of $ 254 million.

The cash strapped Pakistan needs healthy foreign inflows to reduce the pressure on external account build the sliding foreign exchange reserves to fulfill its external debt obligations.

The second component of the foreign investment, ie, portfolio investment also posted 457 percent decline during July-April of FY25. Portfolio investment witnessed $290 million outflow in the first ten months of this fiscal year as against investment of $81.2 million in the same period of last fiscal year.

However, total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment registered a growth of 16.5 percent or $ 171 million to $1.209billion in July-April of FY25 compared to $1.038 billion in the same period of FY24.

Copyright Business Recorder, 2025