FDI shrinks by 25% in FY23 amid economic uncertainty

ISLAMABAD: In the fiscal year 2022-23, Foreign Direct Investment (FDI) experienced a 25 percent decline compared to the previous year, indicating a significant reduction in international investment due to ongoing economic uncertainty.

According to the State Bank of Pakistan's data released on Tuesday, Pakistan received $1.456 billion in FDI from July to June 2023, which is $480 million lower than the $1.936 billion received in the previous fiscal year (FY22).

Furthermore, FDI dropped by 58 percent year-on-year to $114 million in June 2023, compared to $271 million in June 2022.

The data also shows that FDI inflows decreased by 21 percent to $2.13 billion, while outflows decreased by 11 percent to $676 million.

China emerged as the largest investing country, with $432 million invested in Pakistan during FY23. Japan followed with $183 million, followed by the UAE with $180 million, and Switzerland with $134 million.

Sector-wise analysis reveals that the power sector attracted the highest investment of $623 million, followed by the Financial Business sector with $275 million, and the Oil & Gas Exploration sector with $135 million.

In contrast to the previous year's withdrawal of $18 million, the Beverages sector experienced an investment of $69 million throughout the fiscal year.