Foreign direct investment (FDI) in Pakistan dropped by 45% year-on-year, totaling $95 million in February, according to the data released by the State Bank of Pakistan (SBP).
Despite the decline in February, FDI for the period from July to February in FY25 saw an increase of 41%, reaching $1.618 billion, compared to $1.147 billion in the same period last year.
While the government is actively pursuing efforts to boost foreign investment, the rising terrorism within the country is damaging its international reputation and deterring potential investors.
Experts note that the FDI inflow remains significantly lower than that of neighboring countries, and with the current political and economic uncertainties, the outlook for attracting higher foreign investments appears bleak.Â
Additionally, Pakistan has faced challenges in privatizing its loss-making state-owned enterprises due to the ongoing instability.
China continues to be the largest investor in Pakistan, contributing $662 million out of the total $1.6 billion in FDI during the first eight months of FY25.Â
Hong Kong followed with $160 million, while the United Kingdom and the United States contributed $167 million and $68 million, respectively.
