FDI dips 42pc as Chinese investment declines

Published October 19, 2018
Following China, United Kingdom contributed $51m, US $25m and Switzerland $39.6m. ─ Reuters/File
Following China, United Kingdom contributed $51m, US $25m and Switzerland $39.6m. ─ Reuters/File

KARACHI: Foreign direct investment (FDI) declined by 42 per cent during the first quarter of current fiscal year compared to the same period last year falling short of even half billion mark.

Central bank’s data revealed that FDI during July-September FY19 clocked in at $439.5 million compared to $765m last year. Pakistan desperately requires foreign exchange inflows to cap the rising current account deficit.

The decline in inflows comes at a time when Pakistan’s depleting foreign exchange reserves have already fallen to alarmingly low levels at $14.6 billion including State Bank of Pakistan’s (SBP) $8.089bn providing enough only for two months of import cover.

The government has officially approached the International Monetary Fund to borrow $12bn to meet the growing foreign exchange requirements.

The outflow of portfolio investment also deteriorated the overall foreign private investment in the country which fell by 63pc in first quarter. An outflow of $185m was observed in the foreign portfolio investment (FPI) during the quarter under review compared to $78m in the corresponding quarter last fiscal year.

The overall FPI during the quarter declined by 63pc reaching $254m compared to inflows of $687m in the first quarter of last fiscal year. In tandem with last few quarters, China led the list of countries pouring investment into Pakistan.

The Asian giant made up for 64pc of the total FDI during the quarter contributing $281m. However, in comparison with the same period last fiscal year, China’s investments in the country dipped by 43pc during the period under review.

Following China, United Kingdom contributed $51m, US $25m and Switzerland $39.6m.

The present government has announced its plan to develop investment friendly policies to attract foreign investments while it also ensured to reduce cost of doing business in Pakistan.

Published in Dawn, October 19th, 2018

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Regional bonhomie
Updated 23 May, 2025

Regional bonhomie

Trilateral cooperation and commercial activity can lead to prosperity for all involved, specifically Afghanistan.
Local government bill
23 May, 2025

Local government bill

THE PML-N leadership is known for concentrating powers in the hands of the top political office and governing ...
New normal?
Updated 23 May, 2025

New normal?

WHY can’t the PTI and its jailed leader decide what they want? Even while leverage is slipping from its hands, the...
Khuzdar atrocity
Updated 22 May, 2025

Khuzdar atrocity

A process of reconciliation is sorely needed in the province, solely militarised response will be insufficient.
Budget and climate
22 May, 2025

Budget and climate

Govt's plan to present a climate-focused budget for the next fiscal year is a welcome paradigm shift in national economic planning.
Justice for Noor
Updated 22 May, 2025

Justice for Noor

Noor's death was the result of not just one person’s malevolence, but a preventable tragedy caused by several individuals failing to do the right thing.