FDI surges 66pc in seven months

China remains the biggest investor in Pakistan, with a net FDI of $533m

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KARACHI: Foreign Direct Investment (FDI) in Pakistan rose 65.7pc to $1.564 billion during the first seven months (July-January) of the current fiscal year (FY20), according to data released by the State Bank of Pakistan (SBP). 

During the same seven-month period a year ago, FDI in the country stood at $943.6 million. 

On a year-on-year basis, FDI increased to $223.1 million in January 2020, as against $146.8 million recorded during the same month of 2019.

The total foreign investment in Pakistan, including FDI, portfolio investment and foreign public investment, stood at $3.425 billion during the seven-month period, compared to $534.7 million during the same period last year, an increase of 540pc. 

The foreign portfolio investment for the period under review amounted to $21.5 million.

Much of the surge can be attributed to an increase in FDI in communications and the power sector. The highest amount of FDI was in telecommunications, at $433 million, followed by power at $404 million. Financial business witnessed an FDI of $179 million, while FDI in oil and gas stood at $158 million. 

Umer Farooq, investment analyst at AKD Securities, said that while overall growth in FDI is positive, the quality is “not-so-good”.

“The majority of the increase in FDI came from a large one-off fee received on account of cellular licence renewal,” according to Farooq. 

He also criticized the lack of diversity in investment flows, saying that FDI was centric only to a few sectors like power and telecom. 

Country-wide data released by the central bank shows that China remained the largest investor, with net FDI of $533 million during the seven-month period, compared with net investment of $283 million during the same period last year.

The second-largest investor was Norway, with a net FDI of $289 million, compared with $4 million during the same period the year before.

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