By Staff Reporter
KARACHI: Foreign direct investment in Pakistan fell sharply in the first five months of the current fiscal year, underscoring the challenges facing the country’s economy as it grapples with persistent external financing needs.
The State Bank of Pakistan reported that net inflows of foreign direct investment totaled $927.4 million from July through November, a 25 percent decline from the $1.242 billion recorded in the same period a year earlier. The drop amounted to $315 million.
The downturn was evident even in the most recent month, with November inflows slipping 16 percent to $180 million from $214 million in November 2024. The broader picture for foreign capital was bleaker still. Foreign portfolio investment showed a net outflow of $192 million during the five-month period, while foreign public investment registered a net outflow of $422 million.
Taken together, these figures dragged total foreign investment down by 77 percent, to $314 million from $1.391 billion in the corresponding stretch of the previous fiscal year. By sector, the power industry drew the largest share of foreign direct investment, at $384 million. Financial services followed with $327.6 million, and electrical machinery attracted $58 million.
Analysts said Pakistan needs concrete and sustained policy measures to attract higher FDI, warning that weak inflows could further strain the economy at a time when external financing needs remain high.
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