Foreign investment drops by 30pc in first half of FY21

Published January 19, 2021
Foreign direct investment (FDI) fell by 30 per cent in the first half of the current fiscal year. — AFP/File
Foreign direct investment (FDI) fell by 30 per cent in the first half of the current fiscal year. — AFP/File
Salman Khan
Salman Khan

KARACHI: Foreign direct investment (FDI) fell by 30 per cent in the first half of the current fiscal year, reflecting the impact of Covid-19 that is still affecting the country as well as global economies.

The State Bank’s latest data issued on Monday showed the country received $952 million foreign investment during July-December FY21 compared to $1.357 billion in the same period of last fiscal year.

In FY20, Pakistan managed to improve its track record as it received $2.561bn FDI compared to $1.362bn in the preceding year. However, the pandemic drastically impacted global economies suppressing any chance for Pakistan to attract huge amounts of foreign investment.

The impact of heavy outflow from portfolio also played a key role in making the balance sheet poorer in the first half of FY21. The data shows that the outflow during July-December was $244m compared to a net inflow of $18.8m in the same period last year.

Inflows from China also shrink in July-December

The breakup further shows that China made 38pc contribution to the overall $952m FDI the country received in July-December period of FY21. However, the FDI inflows from China also contracted to $359m in the period under review compared to $396m in the same period of last fiscal year.

Beijing has been the major investor in Pakistan for the past few years.

The negative side of FDI trend was the shrinking contribution of other countries.

The other significant contributions were from the United States and UK at $65m and $63m, respectively, both improved from $44m and $58m in the same period of last fiscal year.

The United Arab Emirates (UAE), which was once the biggest trade partner of Pakistan, has started disinvesting like it did in six months of FY20 when the total outflow was $27m. However, in July-December FY21, the inflow was $16.3m.

The inflows from Hong Kong, Malta and the Netherlands were $86m, $56m and $72m respectively.

The country received the highest foreign investment of $261m in electricity, gas, steam and air conditioning supply sectors. While an inflow of $137m was noted in financial and insurance sectors.

Published in Dawn, January 19th, 2021

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Noshki killings
Updated 14 Apr, 2024

Noshki killings

It must be asked why Baloch separatists continue to target civilians as well as security men despite large deployment.
Upholding the law
14 Apr, 2024

Upholding the law

THE recent discord in Bahawalnagar offers a chance to reflect on the sanctity of the law and its enforcement across...
Tragic travels
14 Apr, 2024

Tragic travels

FOR those embarking on road and boat journeys, the probability of fatal accidents has seen a steady rise. The recent...
Security lapses
Updated 13 Apr, 2024

Security lapses

Ensuring the safety of foreign citizens is paramount, not just for diplomatic relations but for our economic future.
An eventful season
13 Apr, 2024

An eventful season

THE Senate chairman and deputy chairman were elected unopposed, and 41 new senators were sworn in on Tuesday,...
Living rough
13 Apr, 2024

Living rough

WE either don’t see them or don’t want to see them — not even when they are actively trying to get our...