Net foreign investment posted a decline of 28 percent during the first quarter of the current fiscal year, mainly due to low portfolio investment. The central bank on Friday said that net foreign investment comprising foreign direct investment (FDI) and portfolio investment had continuously weakened and net foreign investment registered a decline of $181 million during the first three months (July-Sep) of fiscal year 2010-11.
With current decline, net foreign investment decreased to $455.1 million during the first quarter of the current fiscal year as compared to $636.1 million in the same period of last fiscal year 2009. According to statistics, FDI posted a decrease of 9.5 percent, while major decline was in portfolio investment, which stood at 67.5 percent during the period.
Portfolio investment--mainly done in stock market--stood at $67.7 million during July-September of fiscal year 2010-11 as against some $208.2 million in corresponding period of last fiscal year, depicting a decrease of $140.7 million.
FDI posted a decline of $40.5 million to $387.4 million in first quarter of current fiscal year as compared to $427.9 million in same period of last fiscal year. However, there were some indications of improvement in FDI, as during the first two months (July-Aug) decline in FDI was some 40 percent, while currently it has declined to 9.5 percent.
Economists say that despite the uncertainty, foreign investment inflows are higher than expectations and $387.4 million foreign direct investment during the first three months is also an encouraging figure. "Some improvement in FDI is a positive signal and it means that still foreign investors are interested to invest in Pakistan", they said. Meanwhile, including privatisation proceeds total private investment showed a decline of 25.1 percent to $506.9 million during July-September of current fiscal year as previously it stood at $676.5 million.
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