KARACHI: The Foreign Direct Investment (FDI) fell sharply by 33 percent during the first 10 months of the current fiscal year (FY21) compared to the same period of last fiscal year (FY20), the State Bank of Pakistan (SBP) reported Friday.

Economists said that despite some positive developments on the economic front, FDI is on the decline due mainly to lower investment from China under the CPEC-related projects in Pakistan. In addition, international investors are reluctant to invest due to Covid-19 pandemic-related concerns, they added.

The latest data released by the State Bank shows that FDI plunged by $748 million to stand at $1.553 billion during July-April FY21 compared to $2.3 billion in corresponding period of the last fiscal year. During the period under review, FDI inflows were amounted to $2.505 billion as against $952 million outflow.

Although, net Chine’s foreign direct investment in Pakistan is on decline, however, still China ranked one in the list of investing countries. The country-wise details showed that net inflow of FDI from China was $708 million during the first ten months of this fiscal year as against $865 million in the same period of last fiscal year. The FDI inflows from China were $1.02 billion versus $315 million outflow.

Hong Kong is the second largest investing country with net FDI of $128 million and UK ranked third with an investment of $119 million into Pakistan during this fiscal year. Major investment was poured in Power sector amounted to $813 million followed by financial business sector amounted to $213 million and oil & gas explorations sector $189 million.

In addition, portfolio investment continued negative growth with overall outflow of $280 million in July-April of FY21. As recently, the country has launched Euro Bond in the world market, the foreign public investment stood at $2.463 billion, up by 1150 percent.

The total foreign investment in Pakistan, including foreign direct investment, portfolio investment and foreign public investment, mounted up by 98.3 percent or $1.852 billion to $3.736 billion in July-April of FY21.

Month on Month basis, FDI amounting to $158.4 billion was arrived in April 2021 as against $151 million in April 2020, depicting an increase of $7 million.

Copyright Business Recorder, 2021