Instability leads to $11.8m decrease in FDI

KARACHI: Amid the uncertainty prevailing in the country, there has been a decline in foreign direct investment (FDI), which has severely damaged the national economy.

According to the figures released by the State Bank, the FDI witnessed a decrease of $11.8 million in the last financial year ending on June 30.

The last few years saw a constant trend of increase in the FDI, but the uncertain situation in the country has damaged the confidence of foreign investors. Hence, they are neither ready to invest in the current businesses nor the new projects.

Economic experts say foreign investors are interested in investing in countries enjoying political stability, ensuring law and order, offering incentives and giving guarantee to their investments. In this case, law and order improved in Pakistan but the political instability meant that it did not remain a favoured country for investment.

The State Bank says the FDI for the year 2016-17 was $3.451 billion but the amount for 2017-18 stood at $3.439 billion. On the other hand, the foreign investors shifted $680.6 million from the country in the year 2017-18 against $740.2 million in 2016-17.