Daily Times

KARACHI: Foreign Direct investment in the first month of the current fiscal year, 1MFY18, has posted substantial growth of 163 percent to $222.6 million as compared to $84.7 million invested during the same period of the previous fiscal year.

Malaysia emerged as the biggest foreign investor in Pakistan with a total investment of $91.6 million made during the month of July 2017, data released by the State Bank of Pakistan shows.

The contribution of China in Foreign Direct Investment FDI was second biggest to the tune of $72.7 million which is far higher than the investment of 24.3 million made during the same period of last fiscal year 1MFY17.

Other major contributors to the FDI were UAE, Japan, and the United States of America USA who contributed $16.3 million, $13.3 million and $9.6 million respectively.

Pakistan’s trade sector was the major recipient of the foreign investment which attracted 93.9 million followed by power sector which received 56.6 million. Major inflows in power sector were witnessed in coal $ 41 million, thermal $10.4 million and Hydel $5.2 million, the data shows. In July 2016 Power sector had received only $26.1 million, trade $1.1 million and construction $2.3 million.

Oil and Gas exploration and construction sectors received $20 million each in the first month of the current fiscal year. The financial business also attracted $10.9 million as compared to $9.2 million of the last fiscal year.

During the last fiscal year FY17 overall volume of investment was $2,410.9 million as the China stood out single biggest investor with total investment of $1,240.3 million.

Other investors were Turkey with $135.5 million, United States invested $136.9 million and France invested $119 million. United Arab Emirates, United Kingdom, and Saudi Arabia invested $57.1 million, $ 80.4 million and $ 1.9 million, $52.3 million respectively in the outgoing year FY17.

The foreign investment in Pakistan remained subdued due to many reasons including the law and order situation. However, with the launch of operation against elements involved in terrorism the security environment of the country has improved which reflects the increasing FDI trend.

Investment, in the backdrop of ongoing mega projects under CPEC, mainly from China is gradually increasing which is likely to attract other countries to reap the financial benefits of the mega projects.

Pakistan is currently suffering due to constant energy shortage which has multiplied the cost of industrial input and pushed the country far behind other export competitors resulting the export from Pakistan continued to decline.

However, the major chunk of foreign investment is going into energy sector which eventually will increase much-needed electricity to increase the productivity of the country’s major export oriented sectors. Foreign investment in energy and textile sector is expected to reverse the export trend in coming years.

Published in Daily Times, August 17^th 2017.