The country attracted over two billion dollars foreign direct investment (FDI), up by 10 percent, during the first half of the current fiscal year despite poor law and order situation and political uncertainty.
However, portfolio investment depicted a declined of 92 percent during the July-December period of current fiscal year mainly due to the emergency imposed in the country in November 2007. The State Bank statistics show that during the first half of current fiscal year net foreign investment declined by some 32 percent mainly due to huge outflow from portfolio investment.
Net foreign investment stood at 2.169 billion dollars during the first half of current fiscal year as compared to 3.184 billion dollars in same period of last fiscal year, depicting a dipped of 1.015 billion dollars.
Foreign investment components were 103 million dollars portfolio investment and 2.066 billion dollars foreign direct investment (FDI). Ther was no returns from privatisation. Out of net foreign investment, FDI has been up by 193.7 million dollar, to 2.066 billion dollars against 1.872 billion dollars during the corresponding period of fiscal year 2007.
Emergency in November badly affected portfolio investment which declined by 92 percent (1.208 billion dollars) as only 103.2 million dollars portfolio investment was registered.
"Although the country is faced with challenges like political instability, deteriorating law and order situation for the last few months, the huge inflow of FDI shows that it is still an investment-friendly country as foreign investors have invested over $2 billion so far," Muzamil Aslam, a well-known economist, said.
He said that despite imposition of emergency, economy has potential to attract foreign investment, which is a positive sign and indicates that further foreign investment would be seen in the future. He said that after imposition of emergency some 400 million dollars had been drawn from SCRAs during November-December 2007.
He said that after the assassination of Benazir, not a major decline had been seen in the portfolio investment. Therefore, it is expected that portfolio investment would boost in the next few months.