Pakistan witnessed a significant decline in foreign investment in May 2025, with total inflows dropping to $145.1 million, compared to $544.8 million in the same month last year, according to the latest data released by the State Bank of Pakistan (SBP).
Foreign Direct Investment (FDI) during the month stood at $193.92 million, a notable decline from $305.63 million recorded in May 2024. On a month-on-month basis, the figure also fell sharply from the $385 million registered in April 2025.
Cumulatively, FDI during the first eleven months of the fiscal year (11MFY25) amounted to $1.98 billion, reflecting a year-on-year contraction of 7.5% from the $2.14 billion recorded in 11MFY24.
The breakdown of FDI for May 2025 shows gross inflows of $231.68 million, down 34.16% year-on-year. Outflows also declined by 18.35% to $37.76 million.
Portfolio investment under FDI registered a net outflow of $22.5 million in May, a reversal from the $34.21 million inflow seen in May 2024. Foreign public investment also showed a net outflow of $26.3 million during the review month.
As a result, total foreign private investment for May 2025 stood at $171.43 million, significantly lower than the $339.84 million recorded in the same month last year. On a broader level, total foreign investment (including both private and public) during 11MFY25 came in at $1.35 billion, compared to $1.58 billion in the corresponding period last fiscal year.
In sectoral terms, the Financial Business sector emerged as the top recipient of net FDI in May 2025, attracting $53.83 million. This was closely followed by the Mining & Quarrying sector with $53.38 million, and the Power sector, which brought in $39.57 million in net inflows.
Conversely, the Electronics sector witnessed the highest divestment during the month, with foreign investors withdrawing $10.9 million.
Over the 11MFY25 period, the Financial Business sector also maintained its lead, drawing a total of $628.91 million in net FDI — an increase from $570.36 million in the same period last year. The Power sector ranked second with $562.83 million, though this marked a decline from $613.2 million in 11MFY24. The Oil & Gas Exploration sector followed with $265.57 million in net inflows, down 17.21% from $320.79 million last year.
Among sectors witnessing sustained outflows, the Communications sector recorded the highest net divestment of $69.07 million in 11MFY25, compared to a smaller outflow of $2.2 million in the corresponding period last year. The Transport Equipment (Automobile) sector reported a net divestment of $19.01 million, while the Personal Services sector saw an outflow of $13.93 million, both slightly improved from the previous year’s respective outflows.
Despite slight improvements in some sectors, the overall contraction in investment reflects ongoing uncertainty in the country’s macroeconomic environment, as investors remain cautious amid evolving political and financial conditions.
