By Staff Reporter
KARACHI: Pakistan’s foreign direct investment (FDI) rose by 5% in the fiscal year 2025, reaching $2.457 billion, largely driven by a significant influx of Chinese capital.
This growth comes amid improving economic indicators and strengthening investor confidence, as the country’s foreign exchange reserves also saw a notable increase.
According to the State Bank of Pakistan, FDI inflows surged by 27% to $4.026 billion during July-June of FY25, compared to outflows of $1.569 billion, which jumped by 92%. The net FDI still posted a positive gain, climbing by $110 million from the $2.347 billion recorded in the same period of the previous fiscal year.
Analysts noted that the uptick in foreign investment reflects growing confidence in Pakistan’s economy. “With improved economic indicators, foreign investment in the country is gradually increasing as investor’s confidence in the economy is strengthened,” they said. “With surplus current account and surge in the FDI, Pakistan’s foreign exchange reserves are also rising and reached the $20 billion mark.”
A country-wise breakdown shows China as the dominant player, accounting for roughly 50% of Pakistan’s total FDI in FY25. Chinese investments soared by 91%, or $584 million, to $1.227 billion, up from $643 million in FY24, highlighting the deepening economic ties between the two nations.
Hong Kong followed as the second-largest investor, with FDI rising to $470 million from $212 million a year earlier. The United Arab Emirates ranked third, boosting its investments by 114% to $283 million.
On a monthly basis, FDI in June 2025 edged up to $206.6 million, a modest increase of $1.6 million from the $205 million recorded in June 2024, signaling a steady flow of foreign capital into the country.
The rise in FDI, combined with a surplus in the current account, has pushed Pakistan’s total foreign exchange reserves past the $20 billion threshold, a key milestone that underscores the nation’s improving economic stability.
To build on this momentum, Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar recently chaired a meeting of a committee tasked with crafting a comprehensive investment portfolio to attract capital from friendly countries.
The group reviewed the existing foreign investment landscape and proposed a slate of early harvest projects, with discussions centering on strategic sectors like energy, infrastructure, and privatisation.
Dar directed stakeholders to pinpoint viable opportunities, emphasizing initiatives that “can foster shared prosperity and support sustainable economic growth.”
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