KARACHI: The Foreign Direct Investment (FDI) surged 74 per cent in the first four months of this fiscal year with Chinese inflows remaining dominant in the overall mix.

The State Bank of Pakistan (SBP) reported on Tuesday that the country received $939.7 million FDI during the July-October period of 2017-18 compared to $538.7m in the same period last year.

A worrying factor is that excluding Chinese inflows the FDI actually reduced from other parts of the world to $308m during the period under review compared to $344m in the corresponding period last year.

The inflow from China rose to $631.7m constituted over 67pc of the total FDI during the July-October period. It jumped 225pc when compared to $194.6m in first four months of last fiscal year.

Beijing has been investing heavily in power sector as per agreement under the China-Pakistan Economic Corridor (CPEC) project. During the July-October period sector received the highest amount of $422.4m, which accounts for 45pc of the total FDI.

During the same period of FY17 the power sector had received $187.4m.

The construction sector got the second place as it received $177m during July-October compared to just $31m in the same period of the last year.

Telecommunications bounced back compared to last year. The inflow of FDI in this sector rose to $64.9m compared to an outflow of $38.3m during the same period last year.

The financial business and oil and gas exploration sectors received $76.3m and $57.9m, respectively, during the four months of this fiscal year.

The State Bank’s report showed that apart from large Chinese investment, almost all country-wise FDI inflows were less than $100m except Malaysia that invested $107m during the period under review.

The portfolio investment during this period of FY18 noted a net outflow of $53.2m compared to an outflow of $39.6m in the same period of last year.

Pakistan has been expecting to get huge response from international investors (other than China) after restoration of peace in the country and the vulnerable political situation has made it more difficult to attract foreign investments.

Published in Dawn, November 16th, 2017