Foreign Direct Investment (FDI) in Pakistan experienced a 32% decline in December 2024, with inflows falling to $170 million compared to $252 million in December 2023, according to the State Bank of Pakistan (SBP).
Despite the December setback, FDI surged by 20% in the first half of FY25, with total inflows reaching $1.33 billion between July and December, up from $1.11 billion during the same period last year.
The $221 million increase highlights improved investor confidence, even as portfolio investments faced significant challenges.
During the first half of FY25, total FDI inflows amounted to $1.88 billion, with outflows recorded at $554 million.
However, portfolio investments saw an outflow of $222 million during the same period, reflecting ongoing challenges in equity markets.
The SBP also reported that overall foreign investment, which includes FDI, portfolio investment, and foreign public investment, recorded a modest 5.8% increase, reaching $1.247 billion in the first half of FY25 compared to $1.18 billion in the corresponding period of FY24.
While FDI performance remains a bright spot for Pakistan’s economy, policymakers are expected to focus on addressing the challenges in portfolio investments to sustain overall foreign investment growth.
