FDI increases 22.6pc in 11 months

KARACHI: Foreign direct investment (FDI) into Pakistan crossed $2 billion mark in 11 months of the outgoing fiscal year due to increasing investments from China.

Pakistan attracted $2.028 billion in FDI in July-May 2016/17, up 22.6 percent from a year ago, the central bank said on Wednesday, with major inflows going into food processing, construction, electronics, and power [coal] sectors.

FDI rose to $294.7 million in May 2016 from $116.4 million in the same month of last fiscal year. The SBP’s data on foreign investment showed that China remains the top investor country as most of the investments are coming from Chinese companies under the China-Pakistan Economic Corridor (CPEC) scheme.

FDI inflows from the Chinese companies rose to $878 million in July-May FY17, compared with $657.3 million in the corresponding period of last year. Moreover, improvement in investors’ confidence in the country’s economy owing to favourable growth outlook and encouraging business environment are also helping boost the foreign investment inflows.  

The SBP’s data showed that investment from Netherlands increased to $465.6 million in July-May FY17, compared with $29.3 million in the same period of last fiscal year. Investment from France stood at $180.5 million against $84.2 million a year earlier.  

Turkish firms invested $134.7 million against $16.6 million during last year.     The data also revealed that an investment of $476.2 million went into the food sector during July-May FY17, compared with an outflow of $53.2 million in the corresponding period of last fiscal year.

The construction sector attracted $418.2 million in FDI in 11 months against $45.3 million during last year. Net flows to the electronics businesses increased to $146.3 million from $34.5 million a year earlier. Foreign portfolio investment experienced outflow of $411.3 million from the local equity market due to sell-off by investors.