FDI in Pak down by 27 per cent as Chinese investment drops


In the first seven months of the current fiscal year, foreign direct investment in Pakistan saw a 27 percent drop, primarily due to the decrease in investment from its close ally China, a media report said on Tuesday. Foreign Direct Investment (FDI) in Pakistan decreased by 27 percent over the first seven years relative to the same period last fiscal year, said Dawn newspaper, citing the State Bank of Pakistan (SBP).

On Monday, the SBP, the central bank, announced that the FDI during the period July-January FY-21 amounted to USD 1,145 billion against an inflow of USD 1,577 billion during the same period last fiscal year. During January, inflows were USD 192.7 million compared to USD 219 million in much the same month of the previous fiscal year, a decrease of 12%.

The seven-month downturn, however, was largely attributed to a decrease in China’s net FDI and a rise in net outflows to Norway, the study said. Country-wise, the total inflow of FDI from China amounted to USD 402.8 million, compared to USD 502.6 million during the same period last fiscal year.

So far, China’s net FDI is the largest in the list of other countries’ inflows. During the seven months, inflows from China amounted to USD 707.2 million, but the outflow of USD 304.4 million at the same time limited net FDI to USD 402.8 million.

Other countries that earned over USD 100 million in net FDIs were the Netherlands and Hong Kong, as they spent USD 122 million and USD 105 million throughout the first seven months of FY21, individually. During the seven months, the inflows of FDI from the UK (USD 83.8 m), the US (USD 73.5 m), and Malta (USD 60.6 m) were also important.

However, the total inflow of FDI this year was influenced by a dramatic shift in inflows from Norway.

The SBP data reveals that inflows from Norway amounted to USD 288.5 million during the seven months of the previous fiscal year, while net outflows of USD 25.8 million were recorded in the seven months of the current financial year instead of any inflows from the Scandinavian region.

The largest investment in the power sector was USD 475.8 million, compared to USD 373 million in the same period previous financial year, a rise of 27.6%.

141 K Views