KARACHI: Foreign Direct Investment (FDI) in Pakistan declined by 26 percent during the first four months of the current fiscal year (FY26).
According to the State Bank of Pakistan, the country received USD 747.7 million in FDI during July to October FY26, down from USD 1.015 billion in the same period last year, showing a decline of USD 263 million. During this period, total FDI inflows during the period amounted to USD 1.203 billion, while outflows reached USD 456 million.
The second component of foreign investment, portfolio investment, also weakened sharply. It registered a net outflow of USD 160 million in the first four months of the current fiscal year, compared with an outflow of USD 97 million in the same period last year.
Foreign direct investment in Pakistan dives 34% to $568.8mn in FY26’s Q1
Foreign public investment fell as well, showing a decline of USD 379 million during July to October FY26, against an inflow of USD 283 million in the corresponding period of FY25.
The total foreign investment, comprising FDI, portfolio investment, and foreign public investment, registered 82.5 percent decrease. It fell to USD 209.2 million during the first four months of FY26, down from USD 1.196 billion in the same period of FY25, reflecting a decrease of USD 987 million.
However, year on year basis, monthly FDI witnessed an upward trend and rose by 22.6 percent to reach USD 179 million in October 2025 as against USD 146 million in October 2024. This surge is mainly due to slow monthly outflow of FDI, which was USD 139 million compared to inflows of USD 318 million.
Economists said there is an urgent need for concrete steps to restore foreign investor confidence and attract more investment into the country. They noted that steady foreign inflows are essential for a cash-strapped Pakistan to ease pressure on the external account and rebuild its foreign exchange reserves.
Copyright Business Recorder, 2025
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