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.