Net Foreign Direct Investment (FDI) in Pakistan fell 26.1% during the first two months of the ongoing fiscal year (FY23), clocking in at just $169.5 million, revealed the State Bank of Pakistan (SBP) data released on Wednesday.
The figure, during the same period (July-August) of the previous fiscal year, amounted to $229.5 million — a decline of $60 million. During July-August FY23, FDI inflows were $247.8 million against outflow of $78.2 million.
During August alone, net FDI amounted to $110.7 million, a 12% decrease when compared with the same month of the previous year.
Meanwhile, during two months of FY23, overall Chinese investment in the country declined sharply by 31%. However, China remained the largest investing country, accounting for 19.4% of the total share with net FDI of $32.7 million compared with $47.5 million during the same period last year.
The UAE emerged as the second-largest investor with a net FDI of $25 million, compared with $11 million during the same period last year, an increase of 141% and accounting for 15% of the total share.
During 2MFY23, energy sector attracted the major share of investment i.e. 47% ($80 million) followed by financial business sector ($51 million) and communications ($25 million).
The development comes at a time when the country faces a deepening crisis while it makes efforts to increase foreign exchange reserves through non debt-creating inflow.
While Pakistan has recently received some $1 billion inflows from the IMF as tranche of the Extended Fund Facility, and China has rescheduled a loan, investments remain elusive.
Jul-May: FDI into Pakistan falls 4.9% on a year-on-year basis to $1.59bn
On September 18, the Saudi Fund for Development (SFD) also confirmed the rollover of $3 billion deposits with Pakistan for another one year, said the SBP.