Pakistan received a net inflow of $1.644 billion in foreign direct investment during the initial nine months of the current fiscal year, marking a 14% increase compared to the corresponding period last year, as reported by The News on Friday, citing data from the central bank.
However, there was a notable month-on-month (MoM) decrease in FDI. In March, the nation recorded a net FDI inflow of $25.7 million, a significant drop from the $294.2 million recorded in the same month of the previous year.
Data from the State Bank of Pakistan (SBP) reveals that a significant portion of direct investments originated from China, with FDI from Chinese enterprises rising to $684.5 million in July-March FY25, up from $330.3 million in the preceding year. Investments from Hong Kong also saw an increase, reaching $175.9 million in July-March FY25, compared to $153.8 million in the same period last year.
The uptick in FDI is largely attributed to robust inflows within the financial services sector, which amounted to $518.4 million during the nine-month period of this fiscal year, compared to $464.8 million in FY24. The power sector also attracted substantial FDI, reaching $500 million, up from $342.5 million in the previous year.
According to analysts, this surge in foreign investment indicates heightened investor confidence, spurred by economic stability and advancements in International Monetary Fund (IMF) reforms.
Nevertheless, maintaining consistency in policy and governance is crucial. Investors prioritise stability, and frequent regulatory changes or political instability can erode confidence.
