Foreign Direct Investment increases 2.6% to reach $1.87 billion in FY22

Foreign Direct Investment

 Pakistan observed a rise of 2.6 percent in Foreign Direct Investment (FDI) to reach $1.87 billion in the financial year 2021-22. 

The FDI inflows in FY22 were ascribed to the overall investment inflows of $531.6 million from China. 

Meanwhile, the country attracted $249.6 million from the United States, $146.2 million from Switzerland, $143.9 million from UAE, and $137.7 million from Hongkong. 

Sector-wise, the power sector gained the greatest net FDI of $737.6 million in FY22, followed by the Financial Business with $405.3 million, the Oil & Gas exploration sector with $195.3 million, and Communication with $118.9 million. 

Under the foreign public investment, $309.5 million worth of investment was reported in debt securities in FY22, showing a huge 88% YoY drop against the net inflows of $2.55 billion in FY21. 

Read more: Pakistan attracts $1.26 billion in foreign direct investment in eight months

On the whole, the country observed foreign investments of $1.8 billion during FY22, presenting a drop of 61% YoY from $4.5 billion in FY21. 

Though, Chinese investment in Pakistan showed a drop of 29 percent in the last fiscal year because of a slowdown in China-Pakistan Economic Corridor (CPEC) projects. However, China is still the main investor of foreign direct investment in Pakistan with $531.6 million during FY22 compared to $751.6 million in FY21. 

On a year-on-year (YoY) basis, FDI also rose by 92 percent or $130 million to stand at $271 million in June 2022 against $141 million in June 2021. Last year in June, FDI inflows were $293.4 million compared to an outflow of $22.3 million. 

Moreover, economists stated that regardless of some increase in the net FDI, it is still much lesser than the essential investment for the increasing economy of Pakistan. Political unrest and unsustainable economic plans on the domestic front and a record increase in the commodity prices in the world market mostly contributed to lower foreign investments during the last fiscal year, they added. 

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