Net Foreign Direct Investment (FDI) in Pakistan declined 17.1% during the first eight months of the ongoing fiscal year (FY24), clocking in at a mere $820.6 million, revealed State Bank of Pakistan (SBP) data released on Wednesday.
During July-February FY24, FDI inflows were $1,570.9 million against an outflow of $750.3 million.
Net FDI during the same period (July-November) of the previous fiscal year amounted to $990.2 million.
However, during February alone, net FDI amounted to $131.2 million, a 16% increase when compared with the same month of the previous year when it stood at $113.4 million.
It is pertinent to mention that in January the FDI witnessed an outflow of $173.2 million.
Meanwhile, during eight months of FY24, overall Chinese investment in the country declined by nearly 83%, clocking in at $80.4 million in FY24, as compared to $472.4 million in same period last year.
Hong Kong emerged as the largest investor with a net FDI of $234.6 million, compared with $150.5 million during the same period last year, an increase of 56% and accounting for 29% of the total share.
During 8MFY24, the power sector attracted the major share of investment i.e. 30% ($249 million) followed by oil & gas exploration ($151.2 million) and the financial business sector ($125.3 million).
The development comes at a time when the country faces a shortage of dollars as it makes efforts to increase foreign exchange reserves through non-debt-creating inflow.
Pakistan’s current account presented an improved picture and recorded a surplus of $128 million in February 2024 as against a deficit of $303 million in January 2024.
According to the SBP, cumulative current account deficit of this fiscal year also reached below one billion dollar due to a surplus in February 2024.
Overall, the current account deficit declined by 74% during the first eight months of this fiscal year (FY24). Current account posted a $999 million deficit in July-Feb or FY24 compared to $3.846 billion deficit is same period of last fiscal year (FY23), showing a decline of $2.847 billion.