- FDI flows during May registered a decline of 37% YoY
Net Foreign Direct Investment (FDI) in Pakistan fell 4.9% during the first eleven months of the ongoing fiscal year (FY22), clocking in at $1.597 billion, said the State Bank of Pakistan (SBP) on Friday.
The figure during the same period (July-May) of the previous fiscal year amounted to $1.679 billion — a decline of $82.4 million. During the July-May FY22, FDI inflows were $2.329 billion against the outflow of $732.4 million.
During May alone, net FDI amounted to $167.3 million, a massive 36.7% decrease when compared with the same month of the previous year.
Meanwhile, during 11 months of FY22, overall Chinese investment in the country declined sharply by 48%. However, China still remained the largest investing country, accounting for 23% of the total share with net FDI of $373 million compared with $720 million during the same period last year.
The US remained the second-largest investor with a net FDI of $241 million, compared with $122 million during the same period last year, an increase of 97%.
During 11MFY22, power sector attracted a major share of the investment i.e. 36% ($567 million) followed by financial business sector ($373 million) and Oil and Gas Exploration ($188 million).
The decline in FDI comes as Pakistan desperately looks at avenues to increase its SBP-held foreign exchange reserves that decreased another $241 million in the period between June 3 to June 10 to stand at $8.99 billion, said the central bank on Thursday, with the level staying at much less than 1.5 months of import cover.
This is the lowest level of SBP-held foreign exchange reserves since November 2019, and raises questions on Pakistan's ability to meet its needs going forward.