KARACHI: Foreign Direct Investment (FDI) in Pakistan surpassed the $1 billion mark during the first five months of the current fiscal year (FY25), the State Bank of Pakistan (SBP) reported on Tuesday, signaling renewed investor confidence and economic stability.
According to the SBP, FDI recorded a robust growth of 31 percent during the first five months of FY25. Pakistan attracted $1.124 billion in FDI during July-November of FY25 period, compared to $856 million in the same period of the previous fiscal year (FY24), marking an increase of $268 million. The data further revealed that total FDI inflows stood at $1.625 billion, while outflows were recorded at $502 million during the review period.
The significant surge in FDI was primarily driven by Chinese investments. China emerged as the largest contributor, with FDI inflows of $469 million during July-November FY25, compared to $293 million in the same period of the previous fiscal year with an increase of $176 million. Hong Kong ranked second with $116 million, followed closely by the United Kingdom, which contributed $113 million.
On a month-on-month basis, the FDI trend remained encouraging, posting a 27 percent growth in November 2024. The SBP reported that Pakistan received $219 million FDI in November 2024 up from $172 million in November 2023.
Currently, the country needs healthy foreign inflows to build the foreign exchange reserves to fulfill its external debt obligations and build the SBP’s foreign exchange reserves.
However, the second component of the foreign investment i.e. portfolio investment also posted a 505 percent decline during the first five month of this fiscal year. Portfolio investment stood negative of $156 million in July-Nov of FY25 as against an investment of $38.6 million in the same period of last fiscal year.
Total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment registered a growth of 42.2 percent or $ 377.5 million to reach $1.272 billion in the first five months of FY25 compared to $895 million in the same period of FY24.
Copyright Business Recorder, 2024
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