KARACHI: Foreign Direct Investment (FDI) in the first 10 months of 2021-22 went down 1.6 per cent on a year-on-year basis to $1.45 billion, according to data released by the State Bank of Pakistan (SBP) on Friday.

The inflow in April alone was $170.6 million, almost unchanged from a year ago.

The FDI inflow registered no change over the past year despite the weakening in the external account. A record-high trade deficit, gap in the current account and a steep fall in the value of the local currency against the dollar and other major currencies have contributed to the weakening of the country’s external sector.

These negative developments seem to have discouraged foreign investors from taking the risk of bigger investments in Pakistan. However, the overall level of FDI inflows did not take a hit.

A major decline was noted in the inflows from China, which decreased 49.1pc on a year-on-year basis to $355.8m in July-April. China is the biggest trade partner of Pakistan.

The net inflow from the United States increased 98.2pc year-on-year to $223m in the same 10-month period.

FDI from Hong Kong did not show any change. Pakistan received $134m from the Asian country, which is slightly higher than $127m it attracted in the same period of the preceding fiscal year.

Inflows from Switzerland and the United Arab Emirates amounted to $119.8m and $118m, respectively, during the period under review.

Experts believe that uncertainty on the political front can hurt FDI inflows in coming months.

Published in Dawn, May 21st, 2022

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