KARACHI: The foreign direct investment (FDI) surged 56 per cent in the first seven months of FY25.

The State Bank reported on Tuesday that the FDI increased by $548 million, or 56pc, to $1.523 billion during July-January FY25 compared to $975m a year ago.

The growth is impressive, but the size of the FDI was the poorest in the region. The government has been trying to attract foreign investments but could not materialise the idea for higher foreign investments. The Special Investment Facilitation Council has been established to resolve the problems and remove all hurdles to foreign investments, but the situation has not changed much.

The FDI inflows in January were much better than the last year as the country received $194m compared to an outflow of $132m in January 2024.

However, the inflows in 7MFY25 are much better than last year’s performance. The country received $2.346bn in FY24, while inflows reached $1.5bn in 7MFY25. The investment from China jumped by manifold to $633.6m in 7MFY25 against just $118m in the same period last fiscal year. China alone made the difference for higher inflows.

Other significant inflows were from Hong Kong ($154.7m), Switzerland ($144m) and the UK ($148m).

Economists and analysts offer several reasons for this poor size of the FDI, but they believe that the external account is unstable, discouraging foreign investors.

Published in Dawn, February 19th, 2025