Net foreign investment in Pakistan has fallen by 65 percent to 516 million dollars in the first nine months of the current fiscal year owing to energy crisis, unclear economic policies and a serious law and order situation in the country.
According to the State Bank of Pakistan, net foreign investment, which comprises Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI), is still on decline and posted a decline of 946.6 million dollars in July-March period of fiscal year 2011-2012.
With current decline net foreign investment has declined to 0.516 billion dollars in first nine months of current fiscal year compared to an investment of 1.462 billion dollars in corresponding period of last fiscal year. Major decline has witnessed in FPI, which has stood in negative position during the period under review.
With a decline of 127 percent, FPI has registered an outflow of 83.1 million dollars in July-March of FY12 as against 305 million dollars inflows in same period of fiscal year 2011. FDI has dropped by 48 percent or 558 million dollars to 599 million dollars in first nine months of current fiscal year compared to 1.157 billion dollars in same period of last fiscal year.
Economists said that decline in inflows of foreign investment was a matter of concern as the government was already facing high current account deficit and needed huge foreign inflows to make payments. They said that chronic power shortages in the country had put off long-term investors, while poor infrastructure and law and order situation were also some reasons of decline in foreign investment. However, they said, detail analyst revealed that non-economic factors were impeding foreign inflows and needed government attention to resolve those issues.