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KARACHI: Foreign Direct Investment (FDI) continued negative growth and plunged by 47 percent during the first quarter of this fiscal year (FY23).

The State Bank of Pakistan (SBP) on Wednesday reported that Pakistan fetched FDI amounted to $253.4 million during July-Sep of FY23 as against $479.2 million in the same period of last fiscal year (FY22), depicting a decline of $226 million. During the period under review, FDI inflows fell sharply 32 percent to $395.3 million as against $142 million outflows, which rose by 42 percent.

Analysts said that ongoing political and economic uncertainty is a major reason for the slowdown in foreign investment in the country. Pakistan’s foreign exchange reserves are gradually sliding and the country needs massive foreign inflows to build the reserves.

During the period under review, the country wise analysis revealed that UAE is the largest investing country with an investment of $60 million in total FDI. Chinese investment in Pakistan has slightly shrunk; however, with $57 million FDI China still ranked second in the foreign direct investment during July-Sep of FY23. Switzerland ranked third with an investment of $35 million.

Jul-Aug FDI down 26pc YoY

Month-on-month basis, FDI also decreased by 66 percent to $84 million in September 2022 versus $250 million in September 2021. During September 2022, FDI inflows were $147.5 million and outflows were $63.7 million.

The foreign portfolio investment also witnessed a downward trend during July-Sep of FY23. Portfolio investment recorded outflow of $ 12.1 million during the first quarter of this fiscal year, as against $100.5 million outflow in corresponding period of last fiscal year.

Total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment fell massively 84 percent or $1.135 billion during the first quarter of the current fiscal year. Pakistan’s total foreign investment was $223.1 million in July-Sep of FY23 compared to some $1.358 in same period of FY22.

Copyright Business Recorder, 2022

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