KARACHI: Foreign Direct Investment (FDI) posted 61 percent growth during the first month of this fiscal year (FY21) supported by Chinese inflows. According to State Bank of Pakistan (SBP), Pakistan fetched FDI amounted to $114.3 million in July 2020 compared to $71.1 million in July 2019, showing an increase of 60.8 percent or $43.2 million. During the period under review, FDI inflows were $169.1 million as against outflow of $54.8 million.

The detailed analysis revealed that most of inflows of foreign investment were arrived from three countries including China, Malta and Netherlands. These three countries contributed some 55 percent share in the total FDI inflows arrived during this fiscal year.

China's foreign direct investment in Pakistan surged to $27.1 million in the first month of this fiscal year relative to a negative growth of $17 million in same period of the last fiscal year. Malta and Netherlands invested some $18.5 million and $18.2 million respectively during the July 2020.

Economists said that China is continued to invest in several projects under China Pakistan Economic Corridor (CEPC) and the most of the foreign investments was focused towards the Electrical Machinery, Power and oil & Gas sector. They said that higher foreign investment inflows will also help to reduce the pressure on external account. According to the SBP, during the period under review, portfolio investment witnessed a downward trend and declined by 316 percent to stand negative $73.2 million.

Similarly, total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment, surged by 2.2 percent to $107 million in July 2020 up from $105 million in same period of last fiscal year.

Copyright Business Recorder, 2020

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