FY22 FDI surges 2.6pc to $1.868bn

KARACHI: Pakistan fetched Foreign Direct Investment (FDI) of $1.868 billion during the last fiscal year (FY22), the State Bank of Pakistan (SBP) reported on Thursday.

According to statistics released by the SBP, the FDI recorded slight growth of 2.6 percent during the July-June of the last fiscal year. Overall, Pakistan attracted FDI amounting to $1.868 billion during FY22 compared to $1.82 billion during FY21, depicting an increase of $47.3 million. During the period under review, FDI inflows were $2.622 billion as against outflow $754.7 million.

Although, Chinese investment in Pakistan dropped by 29 percent in the last fiscal year due to slowdown in China-Pakistan Economic Corridor (CPEC) related projects. However, China is still the leading investor of foreign direct investment in Pakistan with $531.6 million during FY22 as against $751.6 million in FY21.

During the period under review, the US ranked second with $249.6 million investment, down by 47 percent in the last fiscal year and Switzerland stood third with $146 million FDI.

As the country is facing energy crisis from the last few years, most of foreign investors focused power sector, which attracted $737 million foreign direct investment. Financial business fetched $405 million and oil and gas sector amounted to $195 million investment during the last fiscal year.

On a year-on-year basis, FDI also increased by 92 percent or $130 million to stand at $271 million in June 2022 compared to $141 million in June 2021. During June 2022, FDI inflows were $293.4 million as against outflow of $22.3 million.

Economists said that despite some surge in the net FDI, it is still much lower than required investment for the growing economy of Pakistan. Political uncertainty and unsustainable economic policies on domestic front and unprecedented increase in the commodity prices in the world market largely contributed in lower foreign investments during the last fiscal year, they added.

They believed that unless structural imbalances cannot be addressed, the country will not be able to attract foreign direct investment.

During the period under review, portfolio investment witnessed downward trend and declined 288 percent or $ 595 million. Portfolio investment stood negative of $388 million during the last fiscal year as against $206.6 million investment in FY21.

In addition, foreign public investment also plunged by 88 percent to $309.5 million in FY22 versus $2.555 billion in FY21.

Similarly, net foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment, declined by 61 percent. Net foreign investment in Pakistan decreased to $1.789 billion end of the fiscal year FY22 compared to $4.582 billion in corresponding period of previous fiscal year.

Copyright Business Recorder, 2022