KARACHI: After a long gap, some improvement has been witnessed on the foreign investment front as the Foreign Direct Investment (FDI) in the country rose by 16 percent during the first two months of this fiscal year (FY24).
FDI into Pakistan is on decline for the past many months. It sharply declined by 25 percent to $ 1.456 billion in the last fiscal year (FY23).
However, now once again FDI is presenting an improved picture and posted an increase of 16.1 percent or $32.5 million during July-Aug of FY24. The State Bank of Pakistan (SBP) on Thursday reported that Pakistan fetched FDI amounting to $234 million during the first two months of this fiscal year against $201 million in the corresponding period of last fiscal year (FY23). During the period under review, FDI inflows were $345.3 against the $112 million outflows.
The surge in FDI is mainly due to some Chinese investment in the CPEC related projects. China is the largest contributor in the FDI with $50.4 million investment during July-Aug of FY24. Netherlands ranked second with $ 42 million FDI and Switzerland third with $ 36 million investment in Pakistan.
Month-on-month basis, statistics are also encouraging as FDI rose by 15 percent in August 2023. According to SBP, some $ 146 million worth FDI was received in August 2023 versus $ 127 million in August 2022.
The cash strapped Pakistan is needs healthy foreign inflows to build the sliding foreign exchange reserves to fulfill its external debt obligations.
The second component of the foreign investment i.e. portfolio investment also posted 436 percent surge during the first two month of this fiscal year. Portfolio investment stood at $22.7million in July-Aug of FY24 as against the outflow of $6.7 million in the same period of last fiscal year. During the period under review, foreign public investment also rose by 121 percent to $ 3.9 million.
Total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment registered a growth of 48 percent or $ 84 million to $260.4 million in July-Aug of FY24 compared to $176.4 billion in the same period of FY23.
Copyright Business Recorder, 2023
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