Foreign investment in Pakistan jumps 165% to $167 million in March, but falls 27% in 9MFY26

Pakistan’s foreign direct investment (FDI) rose 165% year-on-year to $167 million in March, despite ongoing regional tensions, according to data released by the State Bank of Pakistan. The inflows increased from $63 million in March last year, reflecting a rise of $104 million.

However, cumulative FDI during July–March FY2025-26 declined by 27% to $1.354 billion, compared to $1.856 billion in the same period last year.

Analysts said the monthly increase was driven by improved short-term market sentiment, following a period in which foreign investors reduced exposure to higher-risk assets amid widening credit default swap spreads.

They noted that while some pressure has eased, long-term FDI trends remain weak, indicating continued investor caution about Pakistan’s economic outlook.

China and Hong Kong remained the largest contributors in March, with combined inflows of $78 million, including $43 million from China and $35 million from Hong Kong.

During the nine-month period, the two accounted for $928 million of total FDI, with $678.6 million from China and $253 million from Hong Kong.

Other inflows during July–March included $144 million from the UAE, $153 million from Switzerland, $88 million from the United Kingdom, and $66 million from Japan.

Experts said the outlook for FDI remains uncertain due to ongoing tensions in the Gulf region, with limited expectations of a sustained recovery in investment flows in the near term.