Year-on-year: FDI rises 7.7% during July-September

Amounts to $216.2m, China remains largest contributor

KARACHI: Pakistan received foreign direct investment (FDI) of $216.2 million in the first quarter of 2015-16, 7.7% higher than the FDI received in the same three-month period of the preceding fiscal year.

According to data released by the State Bank of Pakistan (SBP) on Thursday, FDI increased $15.6 million year on year in July-September, as it amounted to $200.7 million in the corresponding months of 2014-15.



Pakistan has faced low levels of foreign investment in recent years. The SBP has called an increase in FDI “imperative” for the sustainability of the economy’s external sector.

Largest contributor to the FDI in Jul-September was China ($190.2million), followed by the United Arab Emirates ($48.9 million), United Kingdom ($33.4 million), Switzerland ($27.9 million) and Italy ($26.9 million).

Net FDI in September alone clocked up at $96.9 million, up 8% from the net inflow of $89.7 million recorded in the same month of the preceding fiscal year.

The largest net outflow of FDI in July-September was recorded in the petro chemicals ($135.8 million) followed by metal products ($14 million).

The largest increase in FDI in July-September was in the category of power, which attracted $142.5 million. Other sectors that attracted substantial FDI in the first three months of 2015-16 were tobacco and cigarettes ($28.9 million) and oil and gas exploration ($41.4 million). However, the FDI in the oil and gas exploration category dropped 47.5% on a year-on-year basis.

Pakistan received FDI of $709.3 million in 2014-15, which was 58.2% less than the FDI received in the preceding fiscal year. Largest contributor to the FDI during 2014-15 was the United States ($238.7 million), followed by China ($229.5 million) and United Arab Emirates ($222.4 million).

However, the US has pulled out $103.4 million from Pakistan so far in 2015-16 although net inflows from the world’s largest economy amounted to $54.8 million in the same three-month period of the last fiscal year.

DESIGN: NABEEL AHMED

Many foreign investors have left Pakistan for good in recent years because of the energy crisis and bad governance. At least four multinational pharmaceutical companies have left Pakistan for good in the last six years. The category of pharmaceutical and over-the-counter products lost FDI of $47.2 million in the last fiscal year.

However, FDI from China is expected to rise further in view of the recently announced China Pakistan Economic Corridor (CPEC), according to the SBP. “The implementation of infrastructure development and energy projects under the CPEC will further enhance the improving investment environment,” it said in a recent statement.

Published in The Express Tribune, October 16^th, 2015.

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