‘Increase in FDI reflects improved security’

LAHORE: An upsurge in foreign direct investment in FY17 to $2.4 billion, showing a growth of 4.6 percent during 2016/17, reflects the improvement in security situation, the All Pakistan Business Forum (APBF) said in a statement on Saturday.

According to the State Bank of Pakistan (SBP), FDI has shown an upward trend and rose 4.6 percent during the last fiscal year after a very long time.

The country fetched $2.41 billion FDI during July-June of FY17 as compared to $2.305 billion during the same period of the last fiscal year, depicting an increase of $105.6 million.

Ibrahim Qureshi, president of the APBF, said that the country's liberal policies of investment offered one of the most attractive regimes in the region.

Pakistan's trade with the European Union has also increased substantively after the grant of GSP Plus status, he added.

The APBF president appreciated the government's resolve to meet the challenges being faced by the country in the European markets, suggesting it should devise strategies to promote Pakistani products.

He called upon the trade officers to take advantage of the opportunities offered by the China-Pakistan Economic Corridor.

Quoting the figures of the central bank, Qureshi said that China topped the FDI
contributors, as its investment accounted for around 50 percent.

Major inflows were received from The Netherlands, Turkey, France and the UK during July-June of FY17.

China's total investment in Pakistan stood at $1.23 billion, including $1.186 billion FDI and $48.4 billion foreign portfolio investment (FPI).

Qureshi said that despite some increase in foreign investment, the FDI inflows are not sufficient to fully offset the widening current account gap. As a result, the country's liquid foreign exchange reserves declined over $1.7 billion during FY17.

The APBF president advocated the need to raise the country's tax base so that the tax-to-GDP ratio improves.

Besides governance challenges, adverse security perception, political instability and the foreign trade offices role is also vital for the continuity of enhancement in foreign investment, he added.