KARACHI: After witnessing a net divestment in December 2022, the foreign direct investment (FDI) more than doubled to $222 million in January compared to $110m inflows recorded in the same month last year.

The State Bank of Pakistan’s latest data issued on Monday showed that FDI improved mainly on inflows from China and Japan.

Due to persistent political and economic uncertainties, the FDI inflows plunged 44.2pc to $683.5m during the first seven months of this fiscal against $1.22bn in the same period of last year.

The inflows of FDI in January were encouraging since December 2022 noted a net outflow of $17m. However, the inflows from China ($68.4m) and Japan ($59.7m) accounted for over 57pc of the total FDI in January.

During the first seven months, the investment inflows from China and Japan were $200.2m and $134m, respectively. Other significant inflows were from Switzerland ($106m) and UAE ($83m) during the period. However, the biggest net outflow of $231m was noted from Australia in 7MFY23.

Plunges 44pc in 7MFY23

Experts see no hope for higher FDI since the country is still facing political and economic instability. At the same time, one of the top ministers of the PMLN-led coalition government has recently said that Pakistan has already defaulted sending a damaging signal to the entire world.

Practically, Pakistan has yet not declared sovereign default which means no foreign payment of banks or country has been delayed.

Published in Dawn, February 21st, 2023