Pakistan’s foreign direct investment drops 31% to $1.4 billion in 10 months of FY26

Pakistan’s foreign direct investment declined 31% during the first 10 months of FY2025-26 as inflows remained under pressure amid governance and policy uncertainties, according to the State Bank of Pakistan.

The country attracted $1.409 billion in foreign direct investment during July-April FY26 compared to $2.035 billion in the same period last fiscal year.

According to the central bank, gross inflows during the period stood at around $3 billion, while outflows were recorded at $1.57 billion.

The SBP said governance concerns and policy uncertainty continued to affect foreign investor confidence.

The power sector remained the largest recipient of FDI, attracting $786 million during the first 10 months of the fiscal year.

Financial businesses followed with inflows of $659 million during July-April FY26.

The SBP said investment in the financial sector was supported by expansion in Islamic banking, inflows from Kuwait and United Arab Emirates, and continued investment linked to licensing of digital banks.

Among countries, China remained the largest source of FDI with inflows of $739 million, followed by Hong Kong with $256 million and South Korea with $80 million.

Total foreign investment during July-April FY26 stood at $32 million compared to $1.46 billion in the corresponding period last fiscal year.