Many countries have fallen short of their FDI targets in the wake of global economic turmoil including India. Bangladesh too has been unable to attract adequate FDI due to the global economic turmoil. However, FDI in Pakistan has performed exceptionally poorly. FDI in the country has been falling continuously due to domestic economic woes and structural constraints. it diminished by 25 percent year-on-year to only $1.5 billion dollars in FY23. However, some respite has been witnessed in FY24 as the FDI has posted growth in the first quarter of the fiscal year. FDI in July 2023 was up by 17.3 percent year-on-year. FDI in August 2023 was up by 15 percent. And now is September, the growth stood at 54 percent year-on-year. Yet, these net inflows are not enough to address the economic challenges that the country faces.
Net Foreign Direct Investment in Pakistan as seen in the latest numbers announced by the central bank witnessed an uptick of 54 percent year-on-year in September 2023. The rise in net FDI in September was also the third consecutive rise since July 2024. The month-on=month growth in FDI in September was around 22 percent.
China continues to be the largest foreign investor in Pakistan. The country was responsible for $126.3 million in the overall FDI during 1QFY24, which represented over 30 percent of the total net FDI in Pakistan.
Sector wise, FDI continued to be concentrated in the power sector in 1QFY24 with 50 percent share in total FDI. This was followed by the oil and gas sector and financial business sector. The other key sector, telecom and communication attracted net negative FDI with outflows outpacing inflows. During 1QFY24.
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