July-February FDI down four percent

The Foreign Direct Investment (FDI) fell 4 percent during the first eight months (July-February) of current fiscal year (FY15), mainly due to energy crisis and poor law and order. Economists said the current FDI trend is not surprising as since the beginning of this fiscal year it''s on decline and political unrest, energy crisis and worst law and order situation have largely contributed to this trend.
During the last fiscal year privatisation and auction of 3G technology supported the FDI inflows and while this year the government has postponed privatisation of OGDCL due to declining oil prices in the world market as it also hit the share price of oil and gas sector companies, they added. However, during this fiscal year the government has successfully borrowed some $1 billion through the auction of Sukuk bond in the international market, while, some $1.5 billion have been received from the IMF under the Extended Fund Facility.
About the privatisation, analysts said the government has planned to generate some $2 billion through privatisation in FY15 and some of transactions are likely to mature in last quarter. The State Bank of Pakistan (SBP) Tuesday revealed that FDI has posted a 4 percent decline during the first eight months of this fiscal year. FDI stood at $615.5 million in July-February FY15 compared to $640 million in corresponding period of FY14, depicting a fall of $24.5 million. During the period under review, the country received FDI inflows amounting to $1.756 billion against the outflow of $1.141 billion.
Moreover, second component of foreign investment in Pakistan, ie, portfolio investment witnessed a continuous upward journey on the back of improved stock market performance. Portfolio investment rose 397 percent or $155.7 million during the period under review. With current surge, portfolio investment reached $195 million in first eight months of this fiscal year compared to $39.2 million in the same period of last fiscal year. Net inflows of foreign investment, comprising FDI, portfolio investment and foreign public investment registered an increase of 139 percent to reach $1.776 billion at the end of February 2015.