KARACHI: Foreign direct investment (FDI) into the country plunged by 58.4 per cent during the first two months of this fiscal year, data published by the State Bank showed on Wednesday.

The total FDI during the July-August period fell to $156.7 million from $376.9m in the same period last year. Moreover, on a month-on-month basis, the FDI inflows in August declined by a massive 57.8pc to $83.4m from $197.9m in August 2018.

Despite significant improvements in the energy infrastructure and security condition, the government has failed to attract investment in the country whereas the completion of first phase of China-Pakistan Economic Corridor has also brought down overall FDI flows.

Cumulatively, the total foreign investment during the two months under review grew by 6.7pc to $264m compared to $247m during the corresponding period last year.

The SBP data showed that slowdown of inflows from China have brought down the overall figure, as inflows from Beijing during July-August fell to $28.9m compared to $216m whereas inflows during August clocked in at $33.4m.

United Kingdom emerged as the second leading investor in the country pouring $11.7m, followed by UAE with $5.9m and Malaysia $5.4m.

The oil and gas exploration sector remained the pick of foreign investors during July-August period with inflows of $21.3m, followed by $16.4 in transport, $14.9m in electrical machinery and $15.3m in textile in the textile sector.

However, the data for Foreign Portfolio Investment (FPI) rose by a massive 182.8pc to $107.3m against an outflow of $129.6m during the same period last year.

The meagre FDI numbers are massive setback to the government as it is currently undergoing a $6bn reform programme led by the International Monetary Fund to avoid a balance of payments crisis.

The government has taken several measures to curb imports but has failed to increase exports despite massive depreciation of the local currency.

Published in Dawn, September 19th, 2019