FDI falls 48pc  in Jul-Oct

KARACHI: Foreign direct investment (FDI) into Pakistan dropped 48.2 percent to $316.1 million in the four months of the current fiscal year of 2016/17, the central bank data showed on Tuesday.

The country had attracted $610.5 million in FDI in the corresponding period of the last fiscal year. Analysts attributed a falling trend in FDI to slowdown in Chinese inflows.

The SBP figures also revealed that inward investment from the Chinese companies registered a year-on-year decline of 47 percent during July-October FY17. The Chinese firms invested $146.1 million in the country compared with the inflows of $276.3 million a year earlier.  

FDI stood at $66.8 million in October against $207.1 million in the same month of the last fiscal year.   Power, oil and gas exploration, and financial businesses received the least amount of FDI, compared with last year.

FDI inflows in the power sector dropped to $125.9 million against $225 million a year ago. Oil and gas exploration companies attracted $53.8 million worth of foreign investments, which was lower than $84.2 million reported during the last fiscal year. However, telecom sector witnessed an outflow of $15.7 million in July-October FY17 against an inflow of $51.7 million in the same period of FY16.

The slow economic growth in advanced and emerging markets, poor law and order situation, and high tax rates in the country were responsible for the declining levels of FDI in the country. However, some analysts were upbeat about the FDI inflows, and measured that the downward foreign investment was a short-lived phenomenon.

“FDI inflows are likely to gain momentum owing to scheduled inflows in power, construction and food sectors, while non-CPEC (China-Pakistan Economic Corridor) Chinese investment cannot be ruled out this year,” said an analyst. FDI would likely reach $2.5-3.0 billion in FY17 against $1.9 billion last fiscal.