Net foreign investment in the country has decline by 65 percent during the first eight months of current fiscal year 2011-2012 because of adverse law and order situation, energy crisis and uncertainty on economic front.
The State Bank of Pakistan on Monday reported that net inflows of foreign investment (comprising Foreign Direct Investment and portfolio investment) in Pakistan declined to $430.2 million in July-February of fiscal year 2011-2012 as compared to $1.2317 billion in same period of last fiscal year, depicting a decrease of $801.5 million.
Analysts said that poor infrastructure, on going energy crisis, worst law and order situation and unclear economic policies were the major contributors in decline of foreign investment in the country. Government officials are already aware of the problems, but yet no steps have been taken to address these. Although, both component of the investment are on decline, however, major dip has been witnessed in portfolio investment.
The Foreign Direct Investment (FDI) has dropped by 44 percent during the first eight months of current fiscal year mainly due to lack of foreign investors' interest. FDI stood at $558.5 million during July-February of FY12 compared to $989.6 million in corresponding period of last fiscal year, depicting a decrease $431.1 million. The second component of foreign investment ie portfolio investment stood in negative position of $128.3 million in eight months of this fiscal year as against $242.1 million investment in same period of last year.