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The inflows of Foreign Direct Investment (FDI) in Pakistan remained stagnant and fell 52 percent in the first ten months of this fiscal year (FY19). The State Bank of Pakistan (SBP) on Tuesday reported that Pakistan has fetched FDI amounting to $1.376 billion in July-April of FY19 compared to $2.849 billion in same period of last fiscal year (FY18), depicting a decline of $1.473 billion.
During the period under review, FDI inflows were $2.684 billion against outflow of $1.308 billion. Samiullah Tariq, an economist at Arif Habib, said that weak macroeconomic environment and phasing out of CPEC early harvest projects are major reasons of decline in overall FDI during this fiscal year. The second component of foreign investment i.e portfolio investment is also sluggish due to weak performance of the equity market. Portfolio investment stood negative of $408 million, down 200 percent, in the first ten month of this fiscal year.
A massive declined was also witnessed in the foreign public investment as the country has repaid $1 billion against principal amount of Pakistan Sovereign Bond in April 2019. Overall foreign public investment decreased 140 percent or $3.44 billion in July-April of FY19.
Cumulatively, the total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment fell 100 percent. According to the SBP, the country's total foreign investment stood negative territory of $22 million in July-April of FY19 compared to $5.164 billion investment in same period of FY18.
Month on Month basis, Pakistan fetched FDI amounting to $102 million in April 2019 against $228 million in April 2018, depicting a decline of 55 percent or $126 million. During April 2019, FDI inflows were $168.2 million and outflows $66.4 million.
Although, Chinese investment in the country has decreased by 75 percent, however, China is still the top contributor in FDI as its investment accounting for about 31 percent of the total foreign direct investment arrived during this fiscal year. Chinese investment stood at $429 million in the first ten months of current fiscal year compared to $1.725 billion in corresponding period of last fiscal year.

Copyright Business Recorder, 2019

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