KARACHI: The foreign direct investment (FDI) dipped 50 per cent to hit a four-year low as inflows from Beijing dried out after completion of the first phase of the China-Pakistan Economic Corridor (CPEC).
Data published by the State Bank of Pakistan revealed that FDI halved to $1.737 billion from $3.471 same period last year.
The bleak figures come at a time when the government is struggling to contain significant economic challenges on the back of large fiscal and financial needs and weak and unbalanced growth.
Inflows from China, leading investor in the country, during FY19 fell to $540 million compared to $2bn during FY18 as the CPEC enters into the second phase.
On the other hand, data showed that US, with inflows of $155m during FY18, reported outflows of $575m during FY19 as relations between Islamabad and Washington have worsened in the last year.
Inflows from UK during the period under review remained almost unchanged at $230m compared to $212m in FY18 whereas other significant inflows came in from Japan at $118m, Norway $115m, UAE $101.8m and Turkey $73.7m.
Sector-wise, investments were led by the construction sector which attracted $421m, followed by $308.8m in the oil and gas sector, $286.5m in financial business and $134.5m in the chemicals; up from $48.9 in the same period last year.
On the other hand, outflows were reported in the coal power sector, food including beverage sector at $453m, $23.5m and 9.6m respectively.
The government is in dire need for FDI inflows to sustain the pace of reduction in the country’s account deficit, which has narrowed by 29pc during the first 11 months on the back of declining imports and remittances
Published in Dawn, July 16th, 2019