Foreign Direct Investment (FDI) posted an increase of 13 percent during the first 10 months of this fiscal year (FY17) supported by Chinese investment under the CPEC projects. Economists said although FDI is moving upward and better than previous year, however it is still much lower than the country's requirement. They said in the absence of a long-term investment policy, foreign investors are reluctant to invest in Pakistan.
According to State Bank of Pakistan (SBP), the country fetched FDI amounting to $1.733 billion during July-April of FY17 compared to $1.538 billion in the same period of last fiscal year (FY16), depicting an increase of 12.7 percent or $195 million. The total FDI also includes some $34.6 million of privatisation proceeds. During the period under review, FDI inflows stood at $2.07 billion against the outflow of $337 million.
The detailed analysis revealed that most of the investment arrived from China as it contributed some 41 percent in the total FDI arrived during this fiscal year. With Some $744.4 million inflows and $26 million outflow, Chinese direct investment in Pakistan stood at $718 million during July-April of FY17.
Sector-wise analysis revealed that most of foreign investment has been made in power, construction and food sector. The SBP reported that foreign investors invested an amount of $475 million in food sector, $423 million in power and an amount of $256 million in the construction sector during the first 10 months of current fiscal year. According to SBP, during the period under review, portfolio investment witnessed a downward trend and declined by 0.8 percent. Portfolio investment stood negative at $288 million in July-April of FY17.
Month-on-month basis, FDI registered an increase of 17 percent to $132 million in April 2017 compared to $113 million in April 2016. During April 2017, FDI inflows stood at $180.5 million against the outflow of $48.7 million. Similarly, foreign investment in Pakistan, comprising FDI, portfolio investment and foreign public investment, surged by 105 percent to $2.323 billion in July-April of FY17 up from $1.134 billion in the same period of last fiscal year.