Foreign Direct Investment (FDI) presented a dismal performance and posted some 38 percent decline during the first quarter of this fiscal year. The State Bank of Pakistan (SBP) Monday revealed that FDI continuously moving down and fell by 38 percent during July-Sep of FY17 compared to same period of last fiscal year. Pakistan fetched FDI amounting to $249 million during the first quarter of FY17 compared to $403 million in the corresponding period of FY16, depicting a decrease $154 million. Economists argue that political uncertainty and lake of infrastructure is largely contributing to lower foreign investment in Pakistan.
PTI is again preparing for a mega protest in Islamabad and this announcement has created panic among foreign investors, they added. "Foreign investors have adopted the wait-and-see policy and closely monitoring Pakistan''s economy, which is gradually improving," they said and added that foreign investors also need political stability for long-term investment, besides improved economic conditions and basic necessities.
During the period under review, the country received foreign inflows amounting to $344.7 million against the outflows of $95.3 million on account of FDI. The inflows and outflows of FDI are some 48 percent and 64 percent lower, when compared with the same period of last fiscal year.
However, the second component of foreign investment, ie portfolio investment, has posted a surge of 130 percent because of improvement in the country''s equity market. Net inflows of foreign investment in Pakistan comprising foreign direct investment and portfolio investment and foreign private investment fell by 54 percent during July-Sep of FY17. With the current decline, total foreign investment stood at $368 million at the end of first quarter of this fiscal year compared to $793.2 million in the same period of last fiscal year, depicting a decrease of $425 million. Economists said foreign investors always seek a peaceful environment and basic infrastructure including utilities for fresh investment, therefore the government should ensure availability of basic necessities to attract more foreign investment.