Daily Times

KARACHI: Foreign Direct investment (FDI) in Pakistan grew marginally by 4.4 percent in first nine months of the current fiscal to $2.00 billion as compared to $ 2.09 billion invested during the same period of the previous fiscal year, State Bank of Pakistan (SBP) data shows on Tuesday.

China emerged as the single largest foreign investor in Pakistan with total investment of $1.44 billion made during the nine months of Fiscal year 2017-18 (FY18), up from $833 million invested during the same period of last fiscal year.

FDI from China mainly arrived in the power and construction sectors. Besides power and construction, firms in exploration and production (E&P) and financial sector also attracted FDI, though their quantums remained relatively moderate.

The contribution of United States of America (USA) in FDI was second biggest to the tune of $ 614.4 million which is far higher than the investment of $ 37.5 million made during the same period of last fiscal year nine months of FY17.

Other major contributors to the FDI were United Kingdom (UK) with $ 142 million FDI in Pakistan, Malaysia with $ 122.4 million FDI, Switzerland with $ 63.4 4million, Singapore with $ 25.7 million, Sweden with $19 million, and Tukey with $ 18 million in July- March period of FY18.

The SBP said nonetheless, the stagnation in FDI calls for a more concerted policy effort. Though improved power supply and law and order situation have provided some comfort to the business community, a lot remains to be done to advance the business friendly image of Pakistan among foreign investors.

In March 2018, FDI fell by 48 percent to $ 152.7 million, from $ 318.3 million recorded a year ago in same month, according to the latest data released bty the Central Bank.

The SBP’s data on FDI showed that portfolio investment recorded impressive 73.1 percent growth in first nine months of FY18 to negative $ 93.3 million from negative $ 346.3 million in same period of FY17.

During the period under review, the communication sector withessed significant outflow in the tune of $ 183.6 million while foreign telecommunication companies pocketed $162.5 million from Pakistan in nine months of current fiscal.

Power sector remained the main attraction of foreign investors in the Pakistan during the period under review as sector attracted major chunk of investment which is evident from the inflows of foreign investment of $ 712.4 million while sub-sectors of the power group including hydel power generation, thermal power generation and coal based power plants attracted $ 109.2 million FDI, $ 16.9 million and $ 586.3 million FDI respectively.

Due to rapid infrastructure development in Pakistan under CPEC related projects, the other prominent sector to attract foreign investment was construction which received $ 525.4 million.

The communication sector lost 38.8 million FDI million during nine months of FY18 while financial businesses attracted $ 255.5 million during the same period. Trade received $ 72.3 million of which transport equipment received $ 62.7 million.

Published in Daily Times, April 18^th 2018.