Foreign Direct Investment (FDI) maintained a downtrend, falling by 8 percent during the first 10 months (July-April) of current fiscal year (FY15), mainly due to prevailing political uncertainty and poor law and order situation. The State Bank of Pakistan (SBP) Monday revealed that the country fetched $825 million FDI during the first 10 months of FY15 compared to $897 million in the corresponding period of last fiscal year (FY14), depicting a decline of $72 million.
During the period under review, FDI inflows stood at $2.057 billion against the outflow of $1.232 million. The second component of foreign investment in Pakistan, ie, portfolio investment rose by 448 percent or $688 million during the period under review. Portfolio investment reached $841.3 million in July-April of this fiscal year compared to $153.4 million in the same period of last fiscal year. Similarly, during the period under review, net inflows of foreign investment, comprising FDI, portfolio investment and foreign public investment fell by 16 percent. With this decline, net inflows of foreign investment in Pakistan decreased to $2.603 billion in first 10 months of the current fiscal year compared to $3.11 billion in the corresponding period of last fiscal year, depicting a decline of $507 million.
The SBP, in its second quarterly report issued last week, reported that Pakistan has not been able to attract sufficient foreign direct investment, even when our peer countries are experiencing rising FDI inflows. Beverage sector has been performing well for the last three years due to rising demand and resultant capacity expansion by firms as the FDI inflows to beverage sector stood at $63 million during first 10 months of FY15, it added. "Other than the telecom, the activity in FDI remained dull. Only power generation, automobile and banking sectors were able to mobilise slightly higher inflows than last year," the SBP said.
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