FDI falls 52pc to $348m in July-October

KARACHI: Pakistan’s foreign direct investment (FDI) dropped 52 percent to $348.3 million in the first four months of the current fiscal year, the State Bank of Pakistan's data showed on Monday.

In October, the FDI stood at $95 million, down 62 percent from a year ago. It increased by 13 percent month-on-month. The country attracted $84 million in FDI in the previous month.

The financial sector attracted $97.5 million in FDI from global investors in July-October FY2023, which was sharply lower when compared with $152.3 million in the corresponding months of last fiscal year.

The direct investment in the communications sector fell to $16.9 million in July-October FY2023 from $113.6 million a year ago. The investment in the oil and gas exploration sector dropped to $18.5 million from $67.6 million.

However, the investment in the power sector rose to $155.5 million from $116 million. During the first four months of the current fiscal year, energy sector attracted 30 percent of the toal FDI in the country.

The decline in the FDI flows is driven by weak investments from China. The country brought in $74.8 million worth of direct investments from China in July-October FY2023. These inflows stood at $102 million a year earlier.

However, China still remained the largest investing country, accounting for 14.5 percent of the total share . The UAE emerged as the second-largest investor with a net FDI of $69 million, compared with $54 million during the same period last year, an increase of 27.7 percent and accounting for 13 percent of the total share. The country’s lower net FDI inflows in the three months is not a healthy sign for the economy, which is struggling with dwindling foreign exchange reserves and slowing economic growth.