H1 FDI crosses $1 billion mark

Foreign Direct Investment (FDI) crossed $1 billion mark, up by 10 percent, during the first half of current fiscal year (FY17). During the earlier months of this fiscal year, FDI presented a worsening picture as overall inflows were on decline. However, with massive inflows during December, overall FDI posted a growth of 10 percent during the first half of FY17. Previously, FDI fell by 45 percent in first five months of FY17.
Economists said that in the current economic scenario, when the home remittances are on a slow pace and country''s forex reserves are gradually depleting due to external debt payment, increase in the foreign investment is a positive indication and will help build the depleting reserves. They expect the FDI will surge in upcoming months following the arrival of China Pakistan Economic Corridor (CPEC) related investment. The State Bank of Pakistan (SBP) Monday revealed that Pakistan fetched FDI amounting to $1.081 billion during July-Dec of FY17 compared to $978.5 million in the corresponding period of last fiscal year (FY16), depicting an increase of $102 million. During the period under review, overall FDI inflows stood at $1.319 billion against the outflow of $239 million.
Higher FDI inflows during December improved the overall inflows. The country''s FDI stood at $595 million in Dec 2016 against $139 million in Dec 2015. The detailed analysis showed that the second component of foreign investment, ie, portfolio investment is on decline despite improved performance of the country''s equity market. Portfolio investment fell by 7.4 percent and stood in a negative position of $254 million during the first half of this fiscal year.
During the period under review, foreign public investment surged by 119 percent supported by issuance of Sukuk in the world market. Foreign public investment stood at $998.1 million in the first half of this fiscal year compared to $455 million in same period of last fiscal year, showing an increase of $543 million. The country''s total foreign investment (including FDI, portfolio investment and foreign public investment) reached $1.824 billion in July-Dec of FY17 against $1.196 billion in the corresponding period of last fiscal year.