Foreign investment in Pakistan down 22%
August 23 2019 12:06 AM
Gantry cranes stand at Gwadar Port, operated by China Overseas Ports Holding Co, in Balochistan. The total foreign investment in Pakistan fell to $107.2mn during July, lower by 21.64% over $136.8mn recorded in same month of the previous year.


The total foreign investment plunged by 22% in the first month of this fiscal year, reported the latest data from the State Bank of Pakistan (SBP).
The total investment fell to $107.2mn during July, lower by 21.64% over $136.8mn recorded in same month of the previous year.
This could possibly be a worrying sign for the government which has been met with a severe shortage of dollars since coming into power, thanks to the massive current account deficit.
This was led by net foreign direct investment (FDI) of $73.4mn during the period under review, plummeting by 57.79%, from $173.9mn.
On the other hand, portfolio investment was down 19.66% to $33.9mn, as against a net outflow of $42.2mn in July last year.
2018-19 proved to be a dismal year for inflows as annual FDI dipped 61% to a modest $1.251bn, down from $3.23bn in FY18.
This massive decline paints a negative picture for investors who are cautious about their investment which has been on a downward trajectory for several years.
Perhaps the most noteworthy element of the data is the continued downward trend of Chinese investments to Pakistan, which in the wake of China-Pakistan Economic Corridor reached record highs.
In July, there was a net outflow of Chinese investment at $4.5mn, as compared to an inflow of $90.6mn in same month last year.
Recently, Prime Minister Imran Khan iterated that all CPEC projects will be completed in time but there is a growing feeling among the business circle that China has slowed down its economic activities here.
United States was the biggest source of inbound investments during the month, registering net FDI of $16.6mn in July, as against $14.4mn in same period last year.
Malaysia came in a close second with net inflows of $14.6mn, compared to just $2.5mn in same period last year.
Meanwhile, net from the United Kingdom plunged by 78.9% to $11.1mn, from $52.7mn in July last year. The biggest outflow was noted from Kuwait at $16.7mn, which continued July 2018 trend when the figure stood at $13.8mn.
Sector-wise, oil and gas exploration recorded the highest net FDI of $13.2mn in July, down from $19.6mn in same month last year.
This followed by textile where net investments were recorded at $10.7mn and pharmaceutical and OTC products at $10.3mn.
On the other hand, power sector posted an outflow of $14.4mn.

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