Foreign investment falls 9% during July-April

Decline due to reduced foreign direct investment.

KARACHI:

Net foreign investment in Pakistan fell 8.6 per cent to $1.53 billion in the first 10 months of the 2010-11 fiscal year because of a decrease in foreign direct investment, the central bank said on Monday.

Foreign investment totalled $1.68 billion in the same period last year. Foreign direct investment fell 28.6 per cent in the July-April period to $1.23 billion from $1.72 billion in the same period last year, the State Bank of Pakistan (SBP) said.

An uncertain security situation and power shortages have put off long-term investors, analysts say. However, with emerging markets increasingly on the radar of fund managers, Pakistan has seen a flow of foreign investment in the Karachi stock market.

Foreign portfolio investment rose 749.5 per cent to $302 million in the first 10 months of 2010-11, compared with an outflow of $46.5 million in the same period last year.

The government has struggled with an economic slowdown and an International Monetary Fund (IMF) emergency loan package agreed in November 2008 helped it avert a balance of payments crisis and shore up reserves.

It received the fifth tranche of $1.13 billion of the $11.3 billion loan in May 2010. Pakistan and IMF authorities are in Dubai to discuss the release of the next tranche and budget targets for the 2011-12 fiscal year.

Published in The Express Tribune, May 17^th, 2011.