KARACHI: The foreign direct investment (FDI) during July-Jan FY19 declined by over 17 per cent compared to same period last year, according to data released by the State Bank of Pakistan (SBP) on Monday.

However, year-on-year inflows during January increased by 2.404pc reaching $132 million from the $128.9m received during the same month last year.

The SBP data shows that the country received investments worth $1.451 billion during the first seven months of current fiscal year down 17.6pc from $1.761bn in the same period last year.

The central bank’s data for outflow in portfolio investments paints a very bleak picture for the sector as investors pulled out $409m during the seven months against outflows of $74m during the same period last year.

China retained its position as the leading investor in Pakistan making up for the 56.8pc of the total investments with inflows clocking in at $825.5m compared to $1.142bn same period last year; a decline of 27.8pc.

Despite a decline of 25pc, construction remained the pick of investors who poured in $288.9m into the sector from $386.2m last year. However, the biggest drop was noted in power sector as the FDI fell to $233.8m compared to $625.2m in the same period of last fiscal. In addition, investments in financial business sector declined from $303m to $216.7m during the same period last year.

The government has attracted foreign investments in multiple sectors as it has signed memoranda of understanding with China, Saudi Arabia and other Arab countries which could change the situation of inflows but it may be carried forward in the next fiscal year.

The SBP report shows the country has attracted good amount of investments in the sectors which were not significant in the list of FDI last year. The beverages attracted $75.6m (compared to outflow of 5m last year), electrical machinery $126.4m and chemicals $83.5m.

Other than China, UK was the only major country to invest more than $100m during the period under review, reaching $127.4m.

Published in Dawn, February 19th, 2019