Foreign direct investment fell sharply by 38.7 per cent during the first month of the new fiscal FY22 compared to July FY21, following the declining trend noted in the previous fiscal year.
According to data released by the State Bank of Pakistan (SBP), net FDI in different sectors of Pakistan’s economy like energy, telecom and banking sectors slowed down to an eight-month low at $89.9 million in July.
The central bank’s latest data issued showed that the country received only $90 million as FDI during July against an inflow $128.7m in the same month of the previous fiscal.
Singapore emerged as the single largest investor in Pakistan in July. It invested net $16.4 million in the month compared to net $2.3 million in the same month last year, according to SBP. United States appeared as the second largest investor with net $14.9 million in the month under review compared to net $11.5 million in the corresponding month last year.
United States emerged as the second leading foreign investor in Pakistan as its net direct investment into Pakistan amounted to $14.9m in the month of July, followed by Hong Kong with $12.3m, UK with $9.1m, and China with $6.6m.
To note, FDI inflows from the China fell to $21.9m in July’21 from $48.5m in July’20, depicting a decline of 55pc YoY.
UAE appeared as the largest contributor in portfolio investment with $2.6m during the month.
Earlier on Monday, Pakistani dollar-denominated bonds fell by 1.6 per cent in a single session as the investors fear that Pakistan may receive spillover impact due an uncertain situation in Afghanistan. Trading with Afghanistan has already come to the lowest level during recent weeks.
On the other hand, Foreign Portfolio Investment (FPI), which represents an investment in the equity market shown a negative picture, as net FPI outflows stood at $1.1m in July ’21. Sweden emerged as the biggest withdrawal of portfolio investment during the month, as it withdrew $4.8m during July last year.
