ISLAMABAD: Foreign direct investment (FDI) inflows into Pakistan have registered an extraordinary increase of 74 per cent during first four months of the current fiscal year, chiefly due to CPEC, according to Pakistan Board of Investment (BOI).
A BOI statement issued on Thursday revealed that Pakistan received FDI of $939.7 million so far in July-Oct 2017-18 that represents a 74.4 per cent increase when compared to the inflows recorded during the same period of the preceding year.
In the month of October 2017, FDI inflow was recorded to be $277.7 million, more than double of the FDI of $115.3 million in the same month last year.
According to BOI, China was the leading investor country with $631.7 million, up 224.6% from the same period in the financial 2016-17. Chinese firms invested large portion of their funds in energy and infrastructure projects under China-Pakistan Economic Corridor (CPEC).
The net inflow of FDI from Malaysia stood at $107 million in July-Oct FY18, against $9.4 million during the same period last year. French investors accounted for $38.0 million in FDI during the period under review.
Power sector received the lion’s share of foreign funds, followed by construction, financial services and communications sector. The inflow of direct investment in the power sector was increased by 125.4% to $422.4 million in the four months of FY18. The construction sector fetched $177.0 million in FDI, compared to $31.4 million a year earlier.
Telecommunications bounced back compared to last year after inflow of FDI increased to $64.9 million contrary to an outflow of $38.3 million during the same period in FY17. The finance sector and oil & gas exploration sectors received $76.3 million and $57.9 million respectively, during the four months of this fiscal year.
Brighter FDI prospects are expected in FY18 as economy appears to be expanding and work on certain electricity generation and development projects under CPEC remains on track. CPEC had been shifting gears from short to long term projects, including industrial cooperation under CPEC for which BOI was the lead agency, according to the statement.
The board said it had been closely working with Chinese experts from National Development and Reform Commission (NDRC) of China for relocation of Chinese industry into Pakistan and industrialisation of special economic zones (SEZs) alongside CPEC. The third meeting of Joint Working Group (JWG) on industrial cooperation was held on November 9 while the 7th JCC is expected to be held on November 21in Islamabad. Huge Chinese investments are expected in these special economic zones, which will be instrumental in attracting FDI from other countries as well, the statement concluded.
Published in Daily Times, November 17th 2017.