KARACHI: Pakistan recorded a drastic decline in foreign direct investment (FDI) in April 2025, receiving just $25.75 million compared to $294.17 million in the same month last year—marking a steep 91% year-on-year (YoY) drop, according to data released by the State Bank of Pakistan (SBP) on Friday.
The figure also reflects a sharp month-on-month (MoM) plunge from the $385 million in FDI reported in March 2025, indicating growing investor caution amid lingering geopolitical and macroeconomic uncertainties.
Despite the poor monthly performance, cumulative FDI in the first 10 months of the current fiscal year (10MFY25) reached $1.64 billion, showing a modest increase from $1.44 billion recorded in the corresponding period of FY24. Analysts say this improvement is largely due to earlier quarterly inflows, which have now slowed significantly.
Within the FDI category, the country recorded inflows of $176.55 million in April, but this was outweighed by a significant outflow of $150.8 million, representing an alarming 200%+ YoY increase in capital flight. This imbalance significantly contributed to the month’s net investment slump.
In terms of portfolio investments under FDI, April saw an outflow of $15.32 million through equity securities, a reversal from an inflow of $18.63 million seen in the same month last year.
Foreign private investment stood at just $10.43 million in April 2025, a staggering decline from $312.8 million recorded in April 2024.
The situation was exacerbated by an outflow of $116.08 million in foreign public investment via equity securities during the review period. As a result, total foreign divestment in April amounted to $105.65 million, compared to a net inflow of $347.33 million in the same month last year.
On a cumulative basis, Pakistan attracted total foreign investment worth $1.3 billion during first ten months of the fiscal year, sharply lower than the $1.6 billion reported in the corresponding period of FY24. The data highlights growing risk aversion among investors, particularly in sectors affected by policy ambiguity, regulatory uncertainty, and external financing challenges.
The latest figures reflect deepening investor concerns over Pakistan’s fiscal and political landscape, despite the country’s ongoing engagement with the International Monetary Fund (IMF) and recent improvements in macroeconomic indicators.
Experts suggest that unless there is clarity on key reforms—especially in taxation, energy pricing, and regulatory consistency—foreign investment could remain tepid in the near term.
