KARACHI: The Foreign Direct Investment (FDI) in the country fell by 40 percent in the first eight months of current fiscal year (FY23).
The State Bank of Pakistan(SBP) on Monday revealed that the country attracted FDI amounted to $784.4 million during July-Feb of FY23 compared to $1.315 billion in corresponding period of last fiscal year (FY22), showing a decline of $531 million. During the period under review, overall FDI inflows were $1.297 billion as against outflow of $512.5 million.
FDI inflows are continued to present a dull picture due to poor economic situation and political uncertainty in the country. Analysts said that foreign investors are reluctant to invest in the country as the economy is facing a number of challenges.
FDI surges 102% YoY to $222.6mn in January
In the current economic scenario, when the State Bank’s foreign exchange reserves are stood at a very low level of $4.3 billion, the country needs healthy foreign investment to build the reserves and avoid default.
The detailed analysis shows that the second component of foreign investment-portfolio investment also witnessed outflows as the country’s equity market is not performing well. Portfolio investment recorded $8.4 million outflows in July-Feb of FY23 as against $315 million outflows in same period of last fiscal year.
As the country has payback Sukuk on account of foreign public investment in December last year, overall foreign investment in the country stood negative.
However, total foreign investment, including FDI, portfolio investment and foreign public investment, decreased by 112 percent in the first eight months of this fiscal year.
Total foreign investment stood negative $235 million in July-Feb of FY23 versus $1.9058 billion investment in the corresponding period of FY22.
Copyright Business Recorder, 2023
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