KARACHI: Foreign Direct Investment (FDI) declined by 24 percent during the first quarter of this fiscal year (FY21). According to the State Bank of Pakistan (SBP), Pakistan fetched FDI amounting to $416 million in July-Sep of FY21 compared to $546 million in the same period of the last fiscal year (FY20), depicting a decline of $130 million.
Analysts said that since July FDI inflows were on surge and increased by 40 percent during the first two months of this fiscal year supported by healthy inflows from China. However, the FDI inflows in September 2020 are less than September 2019, of which the overall FDI is witnessing negative growth in the first quarter. During September 2019, the country received over $225 million investment in telecomm sector from Norway, they mentioned.
The SBP's statistics revealed that FDI fell sharply 51 percent or $194 million to $189 million in September 2020 compared to net inflow of $384 million investment in September 2019.
The major chunk of the recent foreign investment was contributed by China, which is remained the largest investor with 25 percent share in overall FDI. China's net FDI was urged by 89 percent to $104 million during the first quarter of this fiscal year.
Malta is the second largest investing country with net FDI of $56 million and Netherlands ranked third with an investment of $49 million into Pakistan during July-Sep of FY21. Major investment was poured in Power sector amounted to $113.3 million followed by financial business Sector $102.5 million and Oil & Gas Explorations Sector $67.2 million.
In addition, portfolio investment continued trend of negative growth and fell sharply 578 percent with overall outflow of $109 million in first quarter of this fiscal year versus an investment of $23 million in same period of last fiscal year.
During the period under review, total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment, declined 56 percent or $501 million to $389 million in the first quarter of FY21.
Copyright Business Recorder, 2020