KARACHI: Foreign Direct Investment (FDI) increased by 17 per cent in FY24 compared to the preceding year, though the amount remained lowest in the region of developing economies.

According to data released by the State Bank of Pakistan on Friday, FDI inflows during FY24 reached $1.9 billion, up from $1.62bn in FY23. The inflows for June alone were $168.7 million, compared to $122.4m in the same month a year ago.

Despite political and economic uncertainties during FY24, Chinese investments led the way, amounting to $568m. However, this figure marked a decline from $692m in FY23. China has been Pakistan’s largest investor and trade partner for several years.

Hong Kong was the second-largest contributor, with FDI inflows rising to $358.5m in FY24, up from $250m the previous year.

Other significant inflows included $268m from the United Kingdom, $137m from the United States, and $100m from Singapore.

Sector-wise, the power sector attracted the most foreign investment, receiving $799.9m in FY24, slightly lower than the $898.5m in FY23.

It could be surprising for many that the power sector is the focus of criticism in the country from all segments of society, while the government looks helpless in the face of an extremely complicated electricity pricing system and is thus unable to provide relief to the public.

FDI in oil and gas exploration surged to $303.6m, up from $137m a year ago. The financial sector, including banks and insurance, attracted $208m, down from $276m the previous year.

Inflows in mining and quarrying amounted to $103m, compared to a net outflow of $220m in FY23.

Published in Dawn, July 20th, 2024