FDI rebounds to $214m in May as power, finance sectors drive inflows

FDI rebounds to $214m in May as power, finance sectors drive inflows

April’s weak showing was distorted by one-off cement sector outflows, but cumulative foreign investment remains 28% lower in 11MFY26

Pakistan’s net foreign direct investment (FDI) rebounded sharply to $214 million in May 2026, recovering from $54 million recorded in April, according to data highlighted by Topline Research.

The recovery follows an unusually weak April performance that had been weighed down by a major outflow in the cement sector linked to Attock Cement’s divestment, which temporarily distorted monthly investment trends.

Despite the improvement in May, overall foreign investment inflows remain under pressure. During the first eleven months of FY26 (11MFY26), Pakistan attracted net FDI of $1.623 billion, representing a 28% year-on-year decline compared with the same period last fiscal year.

Country-wise, China, the United Arab Emirates (UAE), and Hong Kong emerged as the largest contributors to Pakistan’s FDI inflows during May, underscoring continued dependence on regional investment partners.

Sectoral data showed that the power sector remained the biggest recipient of foreign capital during the month, followed by financial businesses, indicating investor preference for energy and financial services despite broader macroeconomic challenges.

The rebound in monthly inflows may offer some short-term support to external accounts, though the cumulative decline in FDI highlights that Pakistan continues to face difficulty in sustaining foreign investor confidence and attracting long-term capital at levels seen in previous years.