"A shaky security situation, coupled with chronic power shortages, has put off investors." — File Photo

KARACHI: Net foreign investment in Pakistan fell 28.5 per cent to $455.1 million in the first three months of the fiscal year 2010/11, compared with $636.1 million in the same period last year, the central bank said on Friday.

Out of the total foreign investment, foreign direct investment fell 9.5 per cent in July and September to $387.4 million, from $427.9 million in the same period last year, the State Bank of Pakistan said.

Foreign portfolio investment fell 67.5 percent to $67.7 million in the first quarter ending Sept. 30, compared with $208.2 million in the same period last year.

A shaky security situation, with a Taliban insurgency in the country's northwest, coupled with chronic power shortages, has put off investors, analysts say.

An International Monetary Fund (IMF) emergency loan package agreed in November 2008 helped Pakistan avert a balance of payments crisis and shore up reserves.

It received the fifth tranche of $1.13 billion of the IMF loan of $11 billion in May and Pakistan and IMF authorities are going to meet this month to discuss the release of the sixth tranche.

The IMF last month gave $451 million in emergency funding to Pakistan to help the country rebuild from devastating floods. This was separate from the $11 billion IMF programme.