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Pakistan

FDI in Pakistan falls over 17% in 8MFY24

  • However, net FDI during February alone higher on yearly and monthly basis
Published March 20, 2024

Net Foreign Direct Investment (FDI) in Pakistan declined 17.1% during the first eight months of the ongoing fiscal year (FY24), clocking in at a mere $820.6 million, revealed State Bank of Pakistan (SBP) data released on Wednesday.

During July-February FY24, FDI inflows were $1,570.9 million against an outflow of $750.3 million.

Net FDI during the same period (July-November) of the previous fiscal year amounted to $990.2 million.

However, during February alone, net FDI amounted to $131.2 million, a 16% increase when compared with the same month of the previous year when it stood at $113.4 million.

It is pertinent to mention that in January the FDI witnessed an outflow of $173.2 million.

Meanwhile, during eight months of FY24, overall Chinese investment in the country declined by nearly 83%, clocking in at $80.4 million in FY24, as compared to $472.4 million in same period last year.

Hong Kong emerged as the largest investor with a net FDI of $234.6 million, compared with $150.5 million during the same period last year, an increase of 56% and accounting for 29% of the total share.

During 8MFY24, the power sector attracted the major share of investment i.e. 30% ($249 million) followed by oil & gas exploration ($151.2 million) and the financial business sector ($125.3 million).

The development comes at a time when the country faces a shortage of dollars as it makes efforts to increase foreign exchange reserves through non-debt-creating inflow.

Pakistan’s current account presented an improved picture and recorded a surplus of $128 million in February 2024 as against a deficit of $303 million in January 2024.

According to the SBP, cumulative current account deficit of this fiscal year also reached below one billion dollar due to a surplus in February 2024.

Overall, the current account deficit declined by 74% during the first eight months of this fiscal year (FY24). Current account posted a $999 million deficit in July-Feb or FY24 compared to $3.846 billion deficit is same period of last fiscal year (FY23), showing a decline of $2.847 billion.

Comments

200 characters
Tariq Qurashi Mar 20, 2024 01:27pm
If we want FDI, we will have to simplify the huge amounts of red tape and eliminate the rent seeking that is an unfortunate part of investing in Pakistan. The SIFC needs to help simplify the process.
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