July-October FDI down 48 percent YoY

The Foreign Direct Investment (FDI) maintained a downward momentum and fell by 48 percent during the first four months of this fiscal year (FY17). Economists said although Pak economy is performing well and moving in the right direction, there are several other issues, which need to be addressed to attract fresh foreign investment.
"Pakistan still ranks the lowest among the ease of doing business index, while energy crisis, higher utility tariff and unavailability of basic infrastructure are major hurdles to foreign investment," they added. They said that growing economy needs more foreign investment to create new job opportunities in the country.
The State Bank of Pakistan (SBP) Tuesday revealed that FDI posted a decline of over 48 percent during the first four months of this fiscal year (FY17). Pakistan fetched FDI amounting to $ 316.1 million in July-October of FY17 compared to $ 610.5 million in the corresponding period of last fiscal year (FY16), showing a decline of $ 294.4 million.
During the period under review, FDI inflows stood at $ 480.1 million against the outflow of $ 164 million. The FDI inflows, during the initial four months of this fiscal year, are about 48 percent less than the same period of last fiscal year, in which Pakistan attracted FDI inflows amounting to $ 923.3 million against outflow of $ 318 million.
Month-on-month basis, FDI fell by 68 percent during October 2016 compared to October 2015. With $ 135.5 million inflows and $ 68.7 million outflows, FDI stood at $ 66.8 million in October 2016 against $ 207.1 million in October 2015, showing a decline of $ 140 million.
Due to profit-taking by foreign investors, portfolio investment also witnessed a downward trend. Portfolio investment stood at negative $ 39.1 million in July-October of this fiscal year. Pakistan recently issued five-year Sukuk Bonds amounting to over one billion dollars in the international market. With the arrival of the payment of Sukuk Bonds, foreign public investment posted an increase of 137 percent or $ 660.5 million to reach $ 1.142 billion during July-October FY17 compared to $ 481 million foreign public investment in the corresponding period of last fiscal year.
Foreign investment, comprising FDI and portfolio investment registered an increase of 48.5 percent during first four months of FY17. The country's total foreign investment stood at $ 1.418 4 billion in first four months of this fiscal year compared to $ 955.2 million in the corresponding period of last fiscal year. The surge in total foreign investment has been attributed to issuance of Sukuk Bonds in the world market.