KARACHI: Pakistan’s foreign direct investment decreased 40.4 percent to $784.4 million in eight months of the current fiscal year, the central bank data showed on Monday.The FDI fell 11...
KARACHI: Pakistan’s foreign direct investment (FDI) decreased 40.4 percent to $784.4 million in eight months of the current fiscal year, the central bank data showed on Monday.
The FDI fell 11 percent year-on-year to $101 million in February from $91 million a year earlier. The financial sector attracted $252 million in FDI from global investors in July-February FY2023, which was 16 percent lower when compared with $300 million in the corresponding months of last fiscal year, the State Bank of Pakistan (SBP) data showed.
The investment in the oil and gas exploration sector dropped 38 percent to $106 million in July-February 2023 from $171 million a year earlier. The investment in the power sector fell 16 percent to $347 million from $411 million.
The IMF program's delay, continuous economic and political turmoil, and Pakistan's growing balance of payments crisis have all eroded international investors' confidence in the country's economy.
Delays in the IMF agreement for the disbursement of a $1.1 billion bailout that Pakistan needs in order to avert the threat of default have caused the country’s foreign exchange reserves and the currency to drop.
Before releasing the $1.1 billion tranche, the international lender has instructed Pakistan to set aside $7 billion for debt servicing during the current fiscal year. “While we assume a successful conclusion of the 9th review of Pakistan's IMF programme, the downgrade also reflects large risks to continued programme performance and funding, including in the run-up to this year's elections. Default or debt restructuring is an increasingly real possibility, in our view,” said Fitch Ratings in a report released in February.