The largest net outflow of FDI in July-May was recorded in the cement category ($54.8 million). DESIGN: ESSA MALIK
Pakistan received foreign direct investment (FDI) of $803.2 million in the first 11 months of 2014-15, which is 46.8% less than the FDI received in July-May of the preceding fiscal year.
According to data released by the State Bank of Pakistan (SBP) on Tuesday, FDI decreased by $705.9 million year-on-year in July-May, as it amounted to over $1.5 billion in the first 11 months of 2013-14.
Net FDI in May clocked up at negative $7 million as opposed to the net flows of $612.2 million in the same month of the preceding fiscal year. The huge year-on-year difference in FDI is mainly on the back of the auction of the telecom spectrum, as the one-time sale of 3G/4G licences had fetched the government $610.9 million in May 2014.
The largest net outflow of FDI in July-May was recorded in the cement category ($54.8 million) followed by metal products ($50.2 million) and pharmaceutical and over-the-counter products ($47.4 million).
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.
Other sectors of the economy that experienced a considerable net outflow of FDI in the first 11 months of the current fiscal year were IT services ($31.4 million) and food ($6.8 million).
The largest increase in FDI in July-May was in the category of oil and gas exploration, which attracted $234.9 million. However, it was 48.9% less than the foreign investment received during the same months of the preceding fiscal year when it totalled $460.5 million.
There was a net inflow of FDI amounting to $126.9 million from the telecommunications sector in July-May. In contrast, the same sector had registered a net inflow of $344.3 million of FDI during the same period of the last fiscal year.
Financial businesses attracted $106.2 million worth of FDI in July-May. However, it was down 40.4% from the corresponding 11-month period of the preceding fiscal year.
Largest contributor to the FDI during July-April was the United States ($228.2 million) followed by China ($217.9 million) and United Arab Emirates ($209 million).
FDI in 2013-14 clocked up at $1.63 billion after increasing by 11.99% on an annual basis.
Published in The Express Tribune, June 17th, 2015.
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