KARACHI, March 22: Foreign private investment rose by 98 per cent in the country during the period of July 2006 and March 2007, as reflected in the official figures released on Thursday.

Both foreign direct investment (FDI) and portfolio investment witnessed an almost double inflow as compared with the corresponding period last year.

The current fiscal 2006-07 has been a unique year in terms of record foreign inflows and emergence of some high profile attractions in sectors like finance and telecommunications.

The mobile phone technology generated a boom and foreign inflows rushed to capture the untapped market of 160 million people.

During the first eight months of the current fiscal, the telecommunications sector received record inflow of $1.234 billion which was three times more than last year and highest investment so far in any sector of national economy.

Figures showed that the country received total private foreign investment of $3.952 billion during the said period as against $1.992 billion received during these eight months of last year.

These high inflows would help government offset impact of rising trade deficit and current account deficit. Analysts expect that the trade deficit would remain in the range of $12 billion by the end of current fiscal.

Foreign direct investment during the period rose to $2.970 billion as against $1.521 billion in the same period last year. Similarly, portfolio investment rose to $981 million as compared to $471 million last year.

Sector-wise details of foreign investment show that the financial sector remained the second biggest beneficiary of current high inflows as it received $572 million during the eight months. Last year during the same period, the financial sector received $243 million.

Foreign investment declined in power sector, and only $113.8 million were invested during the eight months, while an amount of $298 million was invested in the same sector.

Analysts believe that the power sector requires much more foreign investment than what it received during this period.

They said in the wake of high energy demand, the power sector needs a boost worth billions of dollars.

They said the government pins high hopes in the power sector and may announce special incentives to attract foreign investment, as done by a previous government for independent power producers.The other major beneficiary of the foreign investment was oil and gas sector which received a total of $352.7 million while the sector received investment to the tune of $190 million during the last year.

“Foreign inflows are good for the government, but are unreliable and are a temporary remedy for rising current account deficit,” said an analyst, adding the government policies should focus on attracting more foreign inflows in different sectors and not to restrict it in few sectors.