Foreign Direct Investment (FDI) declined by 46 percent in the first four months of this fiscal year, the central bank said. The State Bank of Pakistan (SBP) Wednesday reported that Pakistan fetched FDI amounting to $601 million in July-Oct of FY19 compared to $1.12 billion in the same period of FY18, showing a decline of $519 million. During the period under review, FDI inflows stood at $845 million, down 38 percent, against the outflow of $244 million.
Economists said that the higher external payments and lower foreign inflows have already compelled the government to negotiate with the International Monetary Fund (IMF) for another bailout package to build its depleting foreign exchange reserves and avoid default. They said that there was need for long-term investment policy to attract foreign investors, who are still reluctant to invest in Pakistan.
According to the SBP, the second component of foreign investment, ie, portfolio investment also witnessed negative growth due to weak performance of Pakistan's equity market. Portfolio investment stood negative at $296.5 million, down 371 percent, in the first four months of this fiscal year.
Similarly, total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment fell sharply 67 percent during the first four months of current fiscal year. Pakistan's total foreign investment declined to $331.3 million in July-Oct of FY19 compared to some one billion dollar in the same period of FY18, showing a decline of $682 million.
Month-on-month basis, some $161 million FDI arrived in October 2018 versus $354.6 million, depicting a decline of 55 percent or $193 million. During August 2018, FDI inflows stood at $234 million while outflows $73 million.
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