Net FDI falls 27% YoY to $173m in January as inflows from China, UAE decline

Pakistan recorded net foreign direct investment (FDI) of $173 million in January 2026, down 27% year-on-year from $236 million in the same month last year, according to data compiled by Arif Habib Limited based on figures from the State Bank of Pakistan.

Despite the annual decline, China remained the largest source of FDI during the month, contributing $73 million, although this marked a 46% drop compared to January 2025. China accounted for 42% of total inflows during the month.

Hong Kong followed with $25 million in inflows, down 38% year-on-year, representing a 14% share. Inflows from the United Arab Emirates fell sharply to $14 million, a steep 92% decline compared to $178 million in the same period last year, reducing its share to 8%.

Switzerland recorded a modest increase, with FDI rising 7% year-on-year to $17 million, accounting for 10% of total inflows. The United Kingdom contributed $9 million, down 67% from a year earlier, while South Korea’s inflows remained flat at $8 million.

Among smaller contributors, Kuwait stood out with a 402% surge in inflows to $9 million compared to $2 million in January last year. Japan’s contribution remained broadly stable at $4 million, reflecting a 12% decline year-on-year. Other countries collectively accounted for a minor share, with inflows showing significant contraction compared to last year.

On a month-to-month basis, the data reflects continued volatility in foreign investment flows, a pattern visible in the historical trend over the past year. Monthly net FDI has fluctuated widely, with notable peaks in mid-2024 and sharp dips in early 2025, including one month registering a net outflow.

The January figure of $173 million suggests a moderation compared to some of the stronger months seen in 2024, when inflows exceeded $300 million on multiple occasions. However, the overall trajectory remains uneven, underscoring the sensitivity of foreign investment to project-specific inflows and broader economic conditions.

The breakdown indicates that while China continues to anchor foreign investment into Pakistan, inflows from traditional partners such as the UAE and the UK have softened significantly on an annual basis.