KARACHI: Foreign Direct Investment (FDI) jumped 23.5 per cent to $112.3 million in August, up from $90.3m in same month of 2019, reported the State Bank of Pakistan on Thursday.

Month-on-month, the FDI edged lower by $2m or 1.75pc from July’s figure of $114.3m.

In the first two months of FY21, the FDI surged 40pc to $226.7m, compared to $162m in the same period of last fiscal year.

Since the emergence of Covid-19 in March this year, the inflows started falling before the FDI posted an impressive increase of 61pc year-on-year to $114.3m in July.

Details showed that highest inflow of $85.4m during July-August was noted in the financial business, which attracted just $14m in the first two months of the previous year.

Communications also received $37m during the period under review, as against $44.9m in corresponding months of FY20. Similarly, the FDI in electrical machinery more than doubled to $36.5m, from $15m.

Inflows in the oil and gas exploration sector witnessed $34.3m FDI during the two months, as against $25m in the same period of last fiscal year.

Country-wise, FDI from China stood at a mere $6.6m during July-August, but it still higher than $2.9m recorded in the same period of 2019.

For the last several years, China has been the biggest foreign investor in Pakistan as well as the largest trading partner with the balance of trade heavily skewed in its favour.

Other important investors were the UK and US and the inflows showed no significant improvement. The FDI from the Great Britain came in at $18.6m in 2MFY21, compared to $ 17.4m in corresponding period of last fiscal year while those from latter fell to $14.9m, versus $20.7m.

Lower inflows from the US could be a result of the economic damage caused by the coronavirus outbreak in that country, which has the most cases on record.

The highest FDI of $45m was noted from Norway in July-August, which was significantly higher compared to a negligible $0.1m in the same period of FY20.

Netherlands and Malta showed no significant change as the inflows from the two countries were $39.6m and $37m, respectively during July-August.

The economic environment has relatively improved in Pakistan in terms of foreign investment due to relatively low impact of coronavirus.

Published in Dawn, September 18th, 2020