Foreign Direct Investment (FDI) in Pakistan during the first nine months of FY25 (Jul-Mar) showed signs of moderate recovery, rising by 14 percent year-on-year to reach $1.64 billion - cumulative FDI in 9MFY25 rose to $1.64 billion.
However, the sharp plunge in March 2025, where net inflows dropped to just $25.7 million from $294.2 million a year earlier, underscored the fragile and uneven nature of this uptick.
March 2025 was marked by one of the weakest FDI performances in recent years. Gross inflows fell to $176.6 million, down 49 percent from March 2024, while outflows surged to $150.8 million—three times the previous year’s level.
The power sector led the outflows in March. Other sectors, including telecom and mining, also saw capital exit. In contrast, financial services attracted net inflows
China accounted for 42 percent of net FDI in 9MFY25, contributing $684.5 million—more than double its investment in the same period last year. The jump is driven by ongoing commitments under CPEC and energy investments.
Other major contributors included the UK, Hong Kong, and Switzerland, reflecting consistent interest from these traditional partners. Bucking the trend where the Power sector has been leading, the financial services sector attracted the most FDI in 9MFY25. The power sector followed.
FDI in Pakistan during 9MFY25 shows a modest recovery from the previous year, driven by China-led inflows and financial sector strength.
However, the March 2025 collapse and rising outflows highlight the underlying fragility of the investment climate. Without sustained reforms in power, telecom, and governance, and without diversifying its investor and sectoral base, Pakistan’s FDI gains may remain short-lived.
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