RIZWAN BHATTI
KARACHI: Foreign Direct Investment (FDI) posted a healthy increase of 163 percent during the first month of this fiscal year (FY18), supported by Malaysian and Chinese investment.
Economists said higher FDI inflows are a good sign for the economy and will help build the country’s foreign exchange reserves, which are depleting since the beginning of this fiscal year. “In the absence of a long-term investment policy, foreign investors are reluctant to invest in Pakistan, therefore there is need for facilitating foreign investors by bringing in stability in economic policies so that they could invest without any concern,” they added.
They said foreign investment in Pakistan is likely to surge in coming days as the political uncertainty is almost over after the announcement of Panamagate case verdict.
According to State Bank of Pakistan (SBP), Pakistan fetched FDI amounting to $ 222.6 million during July of FY18 compared to $ 84.7 million in the same period of last fiscal year (FY17), depicting an increase of 162.8 percent or $ 138 million. During the period under review, FDI inflows stood at $ 248 million against the outflow of $ 25.1 million.
The detailed analysis reveal that most of investment has arrived from Malaysia and China as these two countries contributed some 73 percent in the total FDI arrived during this fiscal year. Malaysia’s Foreign Direct Investment in Pakistan surged to $ 91.6 million in July 2017, while Chinese investment stood at $ 72.7 million.
Sector-wise analysis revealed that most of foreign investment has been made in trade and power sector. The SBP reported that foreign investors invested an amount of $ 94 million in trade sector and $ 56.6 million in power during the first month of current fiscal year.
According to SBP, during the period under review, portfolio investment witnessed continuous downward trend, declining by 122 percent. Portfolio investment stood negative at $ 11.4 million in July 2017.
Similarly, total foreign investment in Pakistan, comprising FDI, portfolio investment and foreign public investment, surged by 58 percent to $ 212 million in July of FY18 up from $ 134.3 million in the same period of last fiscal year.
During the last fiscal year (FY17), foreign investment in Pakistan rose to $ 2.157 billion against $1.978 billion in FY16.
