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Tuesday March 19, 2024

FDI falls 3.1 percent to $542.1 million in July-Sept

FDI falls: The State Bank of Pakistan (SBP) data showed that foreign direct investment amounted to $559.4 million in the corresponding period a year earlier.

By Our Correspondent
October 18, 2019

KARACHI: Foreign direct investment (FDI) marginally dropped 3.1 percent year-on-year to $542.1 million in the first quarter of the current fiscal year as there was a downward trend in inflows from top sourcing destinations, the central bank’s data showed on Thursday.

The State Bank of Pakistan (SBP) data showed that foreign direct investment amounted to $559.4 million in the corresponding period a year earlier.

Net FDI inflows from the country’s major investor China showed a major decline to $103 million in the three months period compared with $336.6 million during the corresponding period a year earlier.

Chinese-funded early harvest projects under the China-Pakistan Economic Corridor framework have almost come to an end and that reflected in decline in inflows. The second-stage industrial development is likely to revive investments in the times ahead.

In July-September, net FDI inflows from the US and the UK also fell to $22.5 million and $44.9 million from $19 million and $75.7 million, respectively.

Net foreign direct investment from Norway, however, showed a significant jump to $263.7 million during the period. The inflows of $15.5 million, during the corresponding period last year, were less than $40 million in outflow to the Scandinavian country. Telecommunication operator Telenor is by far the largest Norwegian venture in the country.

The SBP’s data showed that sector-wise the country received the biggest foreign direct investment in communications sector with $255.1 million in the first quarter. Investment outflow of $91.5 million outweighed inflow of $44.4 million in the corresponding period a year earlier. Telenor submitted $224.6 million to the government as fee for renewal of its licence issued to the company in 2004.

The second major net FDI was in electrical machinery ($64.8 million), followed by oil and explorations ($34.1 million), hydropower ($27.3 million) and financial business ($24.9 million).

In July-September, total net inflow of foreign private investment registered 51 percent growth owing to substantial increase in portfolio investment during the period.

The total foreign private investment increased to $565 million during the first quarter of the current fiscal year compared with $374 million in the corresponding period of the last fiscal year, the SBP’s data showed.

The foreign direct investment (FDI) posted nominal decline of 3.1 percent to $542 million during the period under review as compared with $559 million in the same period of the last fiscal year.

The inflows under FDI were $763 million during July – September 2019, which was 5.4 percent lower than inflows of $806 million in the corresponding period of the last year. The outflows under FDI declined 11 percent to $221 million compared with $247 million.

The foreign investment in capital market witnessed 112.2 percent increase during the first quarter of the current fiscal year. The portfolio investment recorded $22.7 million inflows during July – September 2019 as against outflows of $185 million in the corresponding period of the last year.

The overall investment after including foreign public investment recorded an increase of 137 percent during the first quarter. The investment after calculating all the heads was recorded at $887 million in the July-September period compared with $374.1 million a year earlier.