FDI soars to 11-month high in September

Net foreign direct investment (FDI) in Pakistan jumped to an 11-month high at $236 million in September 2021.

The investment primarily entered IT and telecommunication, power, oil and gas exploration, and financial sectors.

FDI increased 16 per cent to $236 million in September 2021 compared to $202.8 million in the same month of last year, according to the State Bank of Pakistan (SBP).

Foreign investors made improved investments in September, which helped the country to achieve its quarterly (Jul-Sept) target.

Cumulative FDI inflows in the first three months (Jul-Sept) of the current fiscal year 2021-22 were recorded at $439.1 million, which was 4pc, or $18.5 million, lower compared to $457.6 million in the same period of last year.

According to a local media report whuch quoted a financial expert, Pakistan is expected to attract FDI worth $1.5-2 billion in the fiscal year 2021-22 keeping in view the revival of economic activities.

It may be mentioned here that FDI from the United States surpassed inflows from China during the first quarter of the ongoing fiscal year (1QFY22).

Data released by the central bank shows that FDI from the US jumped to $100.9 million during July-Sept FY22 compared to $19.7m in the same period of last year. Inflows from China have shrunk in 1QFY22 despite the neighbouring country being the largest investor and biggest trade partner of Pakistan.

On the other hand, FDI from China declined by 50pc in 1QFY22, down to $76.9m compared to $154.9m during the same period of FY21.

The country received $439m during the 1QFY22 compared to $457m in the same period in FY21. During the first two months of FY22, FDI declined by 20pc reflecting no improvement on this sector except that China increased FDI.

Other important inflows were $60m from the Netherlands, $49.7m from the United Arab Emirates (UAE), $30.3m from the United Kingdom (UK) and $34.8m from Hong Kong.

Sector wise, the power sector attracted highest FDI worth $131m while communications received $88.4m which included 24m for telecommunications and $64m for Information Technology. Financial business attracted $100.5m in the same quarter.