FDI rises 14% to $1.64bn in July-March FY25

KARACHI: Pakistan’s net foreign direct investment (FDI) increased 14 per cent to $1.644 billion in the nine months of the current fiscal year, the central bank data showed on Thursday.

However, FDI saw a sharp decline on a month-on-month (MoM) basis. In March, the country recorded a net FDI inflow of $25.7 million, compared with $294.2 million in the same month last year.

The State Bank of Pakistan’s (SBP) data indicates that the majority of direct investments came from China, as FDI from Chinese companies rose to $684.5 million in July-March FY25 from $330.3 million a year ago. Investments from Hong Kong also increased to $175.9 million in July-March FY25, compared with $153.8 million in the same period last year.The rise in FDI is driven by strong inflows in the financial services, which reached $518.4 million in the nine months of this fiscal year. That compared with $464.8 million in FY24. The power sector attracted $500 million in FDI, compared with $342.5 million last year.

According to analysts, the rise in foreign investment demonstrates increased investor confidence, which is fuelled by economic stability and progress on International Monetary Fund (IMF) reforms. Nonetheless, it is essential to establish consistency in policy and governance. Investors seek stability and frequent regulatory shifts or political disturbances damage confidence.