The Foreign Direct Investment (FDI) fell by 68 percent during the first two months (July-August) of current fiscal year owing to unavailability of infrastructure, energy crisis and adverse law and order situation. The State Bank of Pakistan on Thursday revealed that net foreign investment, comprising foreign direct investment and portfolio investment, rose by 52 percent during July-August of fiscal year 2012-13 (FY13).
With current decline, net inflows of foreign private investment in Pakistan increased to $107.7 million in first two months of current fiscal year as compared to $51.6 million in corresponding period of last fiscal year, depicting an increase of $56.1 million. During the period under review major component of foreign private investment - FDI - posted a massive decline, while FPI registered upward trend.
FDI narrowed down by 68 percent or $66.2 million to $33 million in July-August of current fiscal year compared to $99.2 million in corresponding period of last fiscal year. The second component of foreign investment, ie portfolio investment posted a surge of 122 percent because of some improvement in the country''s equity market. Portfolio investment reached $74.7 million in first two months of fiscal year 2012-13 against outflows of $74.6 million in the corresponding period of last fiscal year.
The State Bank of Pakistan (SBP) on Thursday decided to disseminate monthly statistics of Foreign Direct Investment (FDI) both on "inflows" and "outflows" basis in order to provide a clear picture of foreign investment in the country. Earlier, SBP used to disseminate monthly FDI statistics on net basis. According to SBP, flight of capital from FDI continues to surge and an outflow of $198.5 million has been registered in FDI during July-August of fiscal year 2012-13 compared to $140.7 million in corresponding period of last fiscal year.
"Adverse law & order situation, lack of infrastructure and rising energy shortfall are chief reasons for the decline in net foreign investment, however it is being observed that the government is not serious to solve these issues," economists said. They said Pakistan is still having investment opportunities to capture foreign investment offering high margins to foreign investors, but it required some seriousness from the government side. Otherwise foreign investment will continue to decline in coming months, they added.