FDI decreases 2.9pc

KARACHI: Foreign Direct Investment (FDI) in the first seven months of 2017-18 amounted to $1.48 billion, down 2.9 per cent or $44 million from a year ago.

According to data released by the State Bank of Pakistan (SBP) on Thursday, the country attracted FDI of $106.1 million in January, slightly down from $110.6 million in the same month of the preceding year.

China has been the primary foreign investor in recent years, thanks to the multi-billion-dollar China-Pakistan Economic Corridor (CPEC). Investment originating from Beijing amounted to more than $1 billion in July-January, which accounts for over 67 per cent of total FDI received. China invested $475 million in the same period of the last fiscal year, SBP data shows.

Other than China, major investors were Malaysia ($118 million), United Kingdom ($94 million) and United States ($73 million). Hungary ($48 million), Netherlands ($42 million), Italy ($30 million), Japan ($29 million), Germany ($26 million) and France ($22 million) also contributed positively to FDI flows.

Countries that pulled their investments from Pakistan during the same period were Norway ($125 million) and Kuwait ($12 million).

Pakistan received FDI worth $2.7 billion in 2016-17, which was 18.4 per cent higher than the preceding fiscal year. However, a major chunk of FDI flows received in 2016-17 belonged to a one-off transaction in which a Dutch company bought the majority stake in Engro Foods. Net FDI from the Netherlands in the preceding year was $460.8 million, accounting for almost 17 per cent of the annual flows.

More than 36 per cent of FDI in July-January came in the power sector, which is the centrepiece of the CPEC. The power sector attracted net flows of $542 million, up 46 per cent from a year ago. Within the power sector, the coal segment received $415 million investment.

Construction has also been a focus of foreign investors’ attention as the sector received net inflows of $385 million in the seven-month period, up 205 per cent from a year ago. Financial businesses received $178 million, followed by the oil and gas exploration sector ($120 million), trade ($55 million), cars ($38 million) and electronics ($35 million).

Investors pulled away almost $30 million from the communications sector, SBP data shows.

Foreign portfolio investment, which includes funds invested in shares and debt securities, amounted to $2.4 billion, up 2.6 times from a year ago.

- Advertisement -
Kazim Alam
Is a senior financial and economic correspondent at Pakistan Today
- Advertisement -

Must Read

‘Made in Pakistan’ auto show to be started at Lahore expo...

All is set to enthrall the car lovers and popular auto players to exhibit their innovations at the Pakistan Auto Show 2022 (PAPS-22) at...