FDI grows 132% to $340.8m as China dominates
Overall, inflows during July-February increase 15.6% to $1.94b
PHOTO: FILE
KARACHI:
Foreign investors’ confidence in Pakistan seems to be on the rise, as they ignored political noise in the run-up to the general election and increased investment in various sectors of the economy.
The State Bank of Pakistan (SBP) reported on Friday that Foreign Direct Investment (FDI) has increased a whopping 132% to $340.8 million in February, compared with $146.7 million in the same month last year.
Cumulatively, in the first eight months (July 2017 to February 2018) of the current fiscal year, FDI rose 15.6% to $1.94 billion from Rs1.68 billion in the same period last year, the central bank added.
The data shows a revival of confidence in long-term projects of the country’s productive sectors, ahead of the general election sometime in the third quarter (July-September) of 2018.
This is contrary to the sluggish investment scenario that prevailed in the last two months (December-January), when foreigners largely held on their investment decisions for Pakistan.
Overseas Investors Chamber of Commerce and Industry (OICC) Secretary General M Abdul Aleem said a big chunk of the foreign investment came from China, which is investing multi-billion dollars in Pakistan, under the banner of the China-Pakistan Economic Corridor (CPEC), in sectors including infrastructure (roads and railways) and power production.
Many European investors in the auto, infrastructure and LNG import terminal sectors are set to make major investment decisions for Pakistan in the near future, he said, adding some of them are waiting for their regulatory approvals to initiate the investment process in Pakistan.
“Pakistan carries huge potential to grow. The investment climate would be much better in the post-election period and may total at around $3 billion this fiscal year.”
In the previous fiscal year, 2017, the country received $2.73 billion in the FDI.
According to the central bank data, China remained the single largest foreign investor with a net investment of $174.4 million in February, followed by the United Kingdom with $87.4 million, Hong Kong with $32.5 million, Switzerland with $9 million and Italy with $8 million.
Construction sector attracted the single largest amount of net (invest/divest) FDI of $86 million in February, power sector received $82.9 million, food $65.2 million, transportation $34.1 million and financial businesses $19.7 million, electronics $16.3 million and oil and gas exploration attracted $15.6 million.
Other sectors, including food packaging, tobacco and cigarettes, chemical, petroleum refineries and cement attracted FDI in single digits.
Bourse investment
Foreign investors, however, divested net $55.6 million at the Pakistan Stock Exchange (PSX) in February. In the first eight months of the current fiscal year, however, they slowed down sales at the bourse, as they divested only $93.5 million compared with $351.9 million in the same period last year.
Net foreign investment - including foreign public, private and portfolio investments - totaled at $4.29 billion in the eight-month period, up 84.5% compared with $2.33 billion in the same period last year.
Published in The Express Tribune, March 17th, 2018.
Foreign investors’ confidence in Pakistan seems to be on the rise, as they ignored political noise in the run-up to the general election and increased investment in various sectors of the economy.
The State Bank of Pakistan (SBP) reported on Friday that Foreign Direct Investment (FDI) has increased a whopping 132% to $340.8 million in February, compared with $146.7 million in the same month last year.
Cumulatively, in the first eight months (July 2017 to February 2018) of the current fiscal year, FDI rose 15.6% to $1.94 billion from Rs1.68 billion in the same period last year, the central bank added.
The data shows a revival of confidence in long-term projects of the country’s productive sectors, ahead of the general election sometime in the third quarter (July-September) of 2018.
This is contrary to the sluggish investment scenario that prevailed in the last two months (December-January), when foreigners largely held on their investment decisions for Pakistan.
Overseas Investors Chamber of Commerce and Industry (OICC) Secretary General M Abdul Aleem said a big chunk of the foreign investment came from China, which is investing multi-billion dollars in Pakistan, under the banner of the China-Pakistan Economic Corridor (CPEC), in sectors including infrastructure (roads and railways) and power production.
Many European investors in the auto, infrastructure and LNG import terminal sectors are set to make major investment decisions for Pakistan in the near future, he said, adding some of them are waiting for their regulatory approvals to initiate the investment process in Pakistan.
“Pakistan carries huge potential to grow. The investment climate would be much better in the post-election period and may total at around $3 billion this fiscal year.”
In the previous fiscal year, 2017, the country received $2.73 billion in the FDI.
According to the central bank data, China remained the single largest foreign investor with a net investment of $174.4 million in February, followed by the United Kingdom with $87.4 million, Hong Kong with $32.5 million, Switzerland with $9 million and Italy with $8 million.
Construction sector attracted the single largest amount of net (invest/divest) FDI of $86 million in February, power sector received $82.9 million, food $65.2 million, transportation $34.1 million and financial businesses $19.7 million, electronics $16.3 million and oil and gas exploration attracted $15.6 million.
Other sectors, including food packaging, tobacco and cigarettes, chemical, petroleum refineries and cement attracted FDI in single digits.
Bourse investment
Foreign investors, however, divested net $55.6 million at the Pakistan Stock Exchange (PSX) in February. In the first eight months of the current fiscal year, however, they slowed down sales at the bourse, as they divested only $93.5 million compared with $351.9 million in the same period last year.
Net foreign investment - including foreign public, private and portfolio investments - totaled at $4.29 billion in the eight-month period, up 84.5% compared with $2.33 billion in the same period last year.
Published in The Express Tribune, March 17th, 2018.