Foreign direct investment: FDI shrinks 48% in Jul-Oct
Investments in power, communication and financial services sectors fall massively
KARACHI:
Foreign direct investment (FDI) in Pakistan has declined by 48% to $316 million in the first four months (Jul-Oct) of the ongoing fiscal year 2016-17, compared to $611 million in the same period of last year, according to data released by the State Bank of Pakistan (SBP) on Tuesday.
The decline in investment in the four months painted a bleaker picture compared to the situation in the previous three-month data. Pakistan had received $249 million in July-September 2016, down 38% compared to $403 million in the same period of previous year.
The country has recorded low levels of foreign investment in recent years. Many foreign investors have pulled out because of a persistent energy crisis and poor governance.
One of the sectors in which the country saw a major decline in investments was power with total FDI of $126 million in the Jul-Oct period, compared to $255 million in the same period of last year.
Another sector that saw a major shift was communications where the FDI was negative $12 million (outflows) in the period under review, compared to $81 million inflows in the corresponding period of last year.
A similar response was seen in the financial services sector where the FDI of $19 million in the four months of this year paled in comparison to $113 million in the same period of preceding year.
Meanwhile, the sectors that experienced an increment in foreign direct investments were food and personal services.
With almost all countries that had traditionally invested in Pakistan now pulling out their investments, China has increased its FDI as part of the China-Pakistan Economic Corridor (CPEC) programme.
Almost half of the total FDI that Pakistan received in the previous fiscal year originated from China alone. FDI from China amounted to $593.9 million in fiscal year 2015-16, up 131.3% from the FDI in the previous year, and constituted 46.3% of the total FDI Pakistan received in the year.
FDI, one of the ways through which a country’s economy is driven forward, has dropped significantly in Pakistan since 2008 mainly because of political uncertainty, security issues and energy shortages.
Published in The Express Tribune, November 16th, 2016.
Foreign direct investment (FDI) in Pakistan has declined by 48% to $316 million in the first four months (Jul-Oct) of the ongoing fiscal year 2016-17, compared to $611 million in the same period of last year, according to data released by the State Bank of Pakistan (SBP) on Tuesday.
The decline in investment in the four months painted a bleaker picture compared to the situation in the previous three-month data. Pakistan had received $249 million in July-September 2016, down 38% compared to $403 million in the same period of previous year.
The country has recorded low levels of foreign investment in recent years. Many foreign investors have pulled out because of a persistent energy crisis and poor governance.
One of the sectors in which the country saw a major decline in investments was power with total FDI of $126 million in the Jul-Oct period, compared to $255 million in the same period of last year.
Another sector that saw a major shift was communications where the FDI was negative $12 million (outflows) in the period under review, compared to $81 million inflows in the corresponding period of last year.
A similar response was seen in the financial services sector where the FDI of $19 million in the four months of this year paled in comparison to $113 million in the same period of preceding year.
Meanwhile, the sectors that experienced an increment in foreign direct investments were food and personal services.
With almost all countries that had traditionally invested in Pakistan now pulling out their investments, China has increased its FDI as part of the China-Pakistan Economic Corridor (CPEC) programme.
Almost half of the total FDI that Pakistan received in the previous fiscal year originated from China alone. FDI from China amounted to $593.9 million in fiscal year 2015-16, up 131.3% from the FDI in the previous year, and constituted 46.3% of the total FDI Pakistan received in the year.
FDI, one of the ways through which a country’s economy is driven forward, has dropped significantly in Pakistan since 2008 mainly because of political uncertainty, security issues and energy shortages.
Published in The Express Tribune, November 16th, 2016.