KARACHI: Foreign Direct Investment (FDI) fell by 17 percent during the first five months of this fiscal year due to significant outflows by Chinese investors.
According to the State Bank of Pakistan (SBP), Pakistan fetched FDI amounting to $717 million in July-Nov of FY21 compared to $864.4 million in the same period of the last fiscal year (FY20), depicting a decline of $147.3 million. During the period under review, FDI inflows stood at $1.291 billion against the outflow of $574 million.
Month-on-month basis, FDI stood negative in November 2020 due to healthy outflow of investment by the Chinese and Norway investors. The FDI posted a negative growth of $16 million in November 2020 as compared to an investment of $192.4 million in November 2019. During November 2020, FDI inflows stood at $303 million versus outflows of $319 million.
The detailed analysis revealed that Chinese and Norway investors pulled out FDI amounted to $218 million and $55 million respectively in November 2020 mainly from power sector. However, still the major chunk of the foreign investment in Pakistan is contributed by China, which is remained the largest investing country with 35 percent share in overall FDI arrived during this fiscal year.
China’s net FDI was urged by 231 percent to $254 million during the July-Nov of this fiscal year up from $76.5 million. Malta is the second largest investing country with net FDI of $92.6 million and Netherlands ranked third with an investment of $88 million into Pakistan during the first five months of FY21.
Sector wise analysis revealed that major investment was poured in Power Sector amounted to $269 million followed by financial business Sector $134 million and Oil & Gas Explorations Sector fetched $100 million foreign direct investment in the first five months of this fiscal year.
In addition, portfolio investment continued negative growth trend. With overall outflow of $205 million in July-Nov of this fiscal year, portfolio investment stood negative $185.5 million versus an investment of $19.5 million in same period of last fiscal year.
During the period under review, total foreign investment in Pakistan (comprising foreign direct investment, portfolio investment and foreign public investment) declined by 81 percent or $1.631 billion to $389.3 million in the first five months of FY21.
Copyright Business Recorder, 2020