KARACHI: Foreign direct investment (FDI) into the country fell 50.7 per cent year-on-year in September to $189 million against $383.5m last year, data released by the State Bank of Pakistan (SBP) showed on Friday.

On a cumulative basis, the FDI fell 24pc in the first quarter of the current fiscal year, compared to 40pc increase in the first two months of FY21.

The SBP’s data showed the FDI fell to $415.7m during July-September FY21 compared to $545.5m in the same period last fiscal year, witnessing a decline of 23.8pc.

The FDI inflows were already poor since the size of inflows is smallest in the region reflecting the extremely low interest of foreign investors in Pakistan. Foreign investment in the first two months of current fiscal year jumped by 40pc compared to same period last fiscal year but remained almost flat compared to July.

Down 24pc in first quarter

However, inflows in September were higher than $112.3m received in August.

The details showed that investment from China was double than the previous fiscal year. The county received $103.6m during the first quarter of FY21 compared to $55.4m last fiscal year. China has been the biggest investor for last few years.

However, inflows from Norway in the first quarter of previous fiscal FY20 boosted the total FDI as the county invested $248m in the country whereas investment during the 1QFY21 was just $30m.

Investment from Hong Kong increased to $38.4m during the first quarter compared to just $6.9m in the same period last fiscal year.

Investment from Malta remained the same at $55.6m during the first quarter of both fiscal years.

The inflow from United States dropped to $18.9m compared to $26.5m in the previous fiscal while the inflows from Netherlands increased to $49m against $14m in the same period last fiscal year.

The biggest attraction for the FDI during the FY21 was power sector which received $113.3m against $32.3m in the same period last fiscal year.

Another attraction was financial business (banks) which received $102.5m in the first quarter compared to $30.7m in the same period of last fiscal.

However, the biggest fall in the investment was seen in the communications sector which received just $37.5m against an inflow of $307.4m in the same period last fiscal year. In fact, it was the telecommunication sector which received the biggest shock as the sector received just $26m against $299m in the last fiscal year.

Oil and gas exploration also showed improvement as it received $67.2m compared to $39.8m of last fiscal.

Published in Dawn, October 17th, 2020