July-November FDI jumps 78 percent YoY

Foreign Direct Investment (FDI) rose by 78 percent during the first five months of current fiscal year (FY20), supported by massive inflows from Norway and China. According to the State Bank of Pakistan (SBP), Pakistan attracted FDI amounting to $ 850 million during July-November of FY20 compared to $ 477.3 million in the same period of last fiscal year (FY19), depicting an increase of $ 373 million. During the period under review, FDI inflows were $ 1.176 billion as against outflow of $ 326 million.

Economists said that the massive surge in FDI inflows is a good indication for the economy and will ease pressure on the country's external account. They said that Pakistan is facing a balance of payment crisis for the last two years and need more foreign inflows to build the foreign exchange reserves and finance the current account deficit.

"Still a number of investors are looking for investment opportunities but they are reluctant to invest in the country due to ongoing political uncertainty," they added.

The detailed analysis revealed that most of investment inflows were arrived from two countries, ie, Norway and China. These two countries contributed some 56 percent in the total FDI arrived during this fiscal year. Norway's direct investment in Pakistan stood at $ 334 million in July-Nov of FY20 against the outflow of $ 74 million in the corresponding period of FY19.

Chinese direct investment posted a notable increase of 51 percent or $ 48 million during this fiscal year. FDI from China reached $ 142 million in first five months of FY20 relative to $ 94 million in the same period of last fiscal year.

According to the SBP, during the period under review, portfolio investment also witnessed an upward trend surging by 106 percent to $ 19.5 million. Foreign public investment stood at $ 1.137 billion.

Similarly, with a remarkable increase, total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment, has crossed $ 2 billion mark.