KARACHI: Foreign Direct Investment (FDI) fell by 30 percent during the first eight months of this fiscal year (FY21).

The State Bank of Pakistan (SBP) reported Wednesday that Pakistan fetched FDI amounting to $1.3 billion during July-Feb FY21 compared to $1.854 billion in the same period last fiscal year (FY20), depicting a decline of $554 million. During the period under review, FDI inflows were $1.984 billion as against outflow of $684 million.

The drop in the overall FDI was mainly due to a massive decline in net FDI from China and increase in net outflow to Norway and Austria. However, still the major foreign investment was contributed by China during this fiscal year.

The country-wise details showed that with 38 percent share in overall foreign direct investment, China is remained the largest investing country. China's net FDI stood at $494 million during Jul-Feb FY21 compared to $655 million in same period of last fiscal year.

Netherlands is the second largest investing country with net FDI of $117million and Hong Kong ranked third with an investment of $106.3 million into Pakistan during the first eight months of this fiscal year.

In addition, massive outflow by Norway investors also affected the overall FDI. Net FDI outflows to Norway were $32 million as against an investment of $288.5 million last year.

According to the SBP data, portfolio investment during July-Feb FY21 noted net outflow of $256 million. The overall foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment, declined 77 percent to $912 million in the period Jul-Feb FY21 down from $3.99 billion in corresponding period of last fiscal year.

Month on Month basis, FDI during January 2021 was $155 million compared to $277.5 million in January 2020, fell 44 percent or $122.4 million.

Copyright Business Recorder, 2021