10MFY15: FDI dips 8%, clocks in at $824.9 million

Largest net outflow recorded in pharmaceutical category

KARACHI:

Pakistan received foreign direct investment (FDI) of $824.9 million in the first 10 months of 2014-15, which is 8% less than the FDI received in July-April of the preceding fiscal year.

According to data released by the State Bank of Pakistan (SBP) on Monday, FDI decreased by $72.1 million year-on-year in July-April, as it amounted to $897 million in the first 10 months of 2013-14.

FDI in April alone was $114.9 million as opposed to the net flows of $94.7 million in the preceding month.

With a net FDI of negative $47.5 million in the 10-month period, the largest net outflow of FDI in July-April was recorded in the category of pharmaceutical and over-the-counter products.

Multinational pharmaceutical company, Johnson and Johnson, recently wound up its operations from Pakistan and sold the company to a Pakistani pharmaceutical company for reportedly $30 million. At least four multinational pharmaceutical companies have left Pakistan for good in the last six years.

FDI in 2013-14 clocked up at $1.63 billion after increasing by 11.99% on an annual basis. The increase during the last fiscal year was mainly on the back of the auction of the telecom spectrum that fetched the government $610.9 million in May 2014.

Sectors of the economy other than pharmaceuticals that experienced a considerable net outflow of FDI in the first 10 months of the current fiscal year were metal products ($45.2 million), information technology ($23.2 million), food ($11 million), cement ($2.5 million) and industrial electronics ($8 million).

The largest increase in FDI in July-April was in the category of oil and gas exploration, which attracted $216.1 million. However, it was 49.1% less than the foreign investment received during the same months of the preceding fiscal year when it totalled $424.7 million.

There was a net inflow of FDI amounting to $132.6 million from the telecommunications sector in July-April. In contrast, the same sector had registered a net outflow of $181.4 million of FDI during the same period of the last fiscal year.



Financial businesses attracted $97.9 million worth of FDI in July-April. However, it was down 40.9% from the corresponding 10-month period of the preceding fiscal year.

Largest contributor to the FDI during July-April was the United States ($211 million) followed by China ($203.4 million) and United Arab Emirates ($184.1 million).

Published in The Express Tribune, May 19^th,  2015.

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