Foreign Direct Investment (FDI) is performing well, posting an increase of 10 percent during the first seven months of this fiscal year (FY17). According to State Bank of Pakistan (SBP), Pakistan fetched FDI amounting to $1.162 billion during July-January of FY17 compared to $1.057 billion in the same period of last fiscal year (FY16), depicting an increase of 9.9 percent or $105 million. During the period under review, FDI inflows stood at $1.458 billion against outflow of $297 million.
Economists said although FDI is gradually improving compared to previous year, however still it is much lower than the country's requirement. They said Pakistan can attract more foreign investment by constant economic policies. They said the government is making efforts to sign a 'National Economic Charter' with opposition parties for stability in economic policies. The country will fetch fresh and massive foreign investment, if the government successfully make consensus on this charter, they added.
The detail analysis revealed that Chinese and Netherland investors have largely invested their capital in power and food sector during the period under review. These two sectors have a share of over 70 percent in total foreign direct investment arrived in Pakistan during this fiscal year.
The SBP reported that foreign investors invested an amount of $468.3 million in food sector and $245 million in power sector during the first seven months of current fiscal year. In addition, during the period under review, electronic, oil and gas exploration sectors attracted FDI amounting to $135 million and $93 million, respectively.
According to SBP, during the period under review, portfolio investment witnessed a downward trend declining by 13 percent. Portfolio investment stood negative at $354.7 million in July-January of this fiscal year compared to the outflow of $313.7 million in the corresponding period of last fiscal year. Similarly, foreign public investment surged by 125 percent to $1.024 billion at the end of January 2017.
Foreign investment in Pakistan, comprising FDI, portfolio investment and foreign public investment rose by 53 percent or $632 million to $1.831 billion during the first seven months of this fiscal year up from $1.198 billion in the same period of last fiscal year. Month-on-month basis, FDI registered an increase of 4 percent to $81 million in January 2017 compared to $78 million in January 2016. During January 2017, FDI inflows stood at $139 million against the outflow of $58 million.