Foreign investment halves to $1.4bn
As the government embarks on an arduous journey to fix the economic imbalances with the help of International Monetary Fund (IMF) bailout, the foreign direct investment (FDI) halved to $1.376 billion during the first 10 months of this fiscal year from $2.489bn in the corresponding period last year.
The FDI inflows fell to $101.8 million in April, down 42.6 per cent compared to $177.5m in March and plunged by 55.2pc year-on-year compared to $227.5m in April 2018.
Inflows from China, leading investor in the country, declined by 72 per cent to $429m during the July-April period compared to $1.731bn in the same period last fiscal year as major infrastructure-related projects under the China-Pakistan Economic Corridor near completion.
However, the United Kingdom and the United States with $156m and $76m respectively also shied away from investing in the country amid record fall in the rupee’s value and economic slowdown.
On the other hand, investment from Netherlands dropped to $67.5m during the period under review from $86.5m in the same period last year.
Sector-wise, construction led the chart attracting $386.8m during the July-April period of 2018-19 followed by oil and gas exploration, financial business, and electrical machinery with $287.3m, $256.6m, and $287.3m respectively.
Power sector, however, witnessed an outflow of $281m during the first 10 months against $1bn FDI in the same period last year followed by net outflow of $144m in the communication sector.
On a monthly basis, inflows in the financial business and power sector led with $22.1m and $19.8m respectively.
The falling FDI is a troublesome for the government as the inflows from foreign countries help prop up the country’s current account balance which has worsened amid declining exports.
The government, in order to avoid a balance of payments crisis, approached IMF to secure a bailout programme. Moreover, portfolio investment outflow was $990.6m during the period under review compared to inflow of $2.45bn during the same period last year.
Published in Dawn, May 22nd, 2019
