Pakistan FDI drops over 29pc in first eight months of FY21

The Foreign Direct Investment (FDI) in Pakistan continued its negative trajectory after it fell by a whopping 29.9 percent on Year on Year (YoY) in the first eight months of the current fiscal year (FY21).

As per the latest data released by the State Bank of Pakistan (SBP) on Wednesday, Pakistan received FDI amounting to $ 1,300.4 million in July-Fab of FY21 compared to $ 1,854.5 million in the same period of last fiscal year (FY20), depicting a decrease of $ 554.1 million.

During the period under review, FDI inflows stood at $1.984 billion against the outflow of $ 683.6 million. The second component of foreign investment, ie, portfolio investment also witnessed a negative growth as portfolio investment registered an outflow of $ 132.2 million during the eight months period of this fiscal year.

Similarly, total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment, and foreign public investment fell sharply 77.1 percent during Jul-Fab FY21. Pakistan’s total foreign investment declined to $ 911.9 million in July-Fab of FY21 compared to some $ 3.989 billion in the same period of FY20, showing a decline of $ 3,077.4 million.

FDI fell by 44.04pc on a YoY basis to $155 million in the month of February 2021 as compared to the same month in 2020. On an MoM basis, FDI witnessed a decline of 19.69pc as compared to Jan 2021.

Despite the drop in Chinese investment in Pakistan, China remained the top destination from where the foreign direct investment arrived in FY21. Chinese investors invested some $ 493.9 million in Pakistan during Jul-Fab FY21.

Netherland and Hong Kong with an investment of $ 117.8 million and $ 106.3 million were the major contributors to the FDI.

The power sector attracted the highest investment of $ 536.7 million during July-Fab FY21.