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Pakistan's foreign investment falls 64 pct y/y in July-Dec

January 17, 2012

Series of economic and security issues result in the decline of FDI in Pakistan. - File Photo.

KARACHI: Pakistan received $386.6 million in foreign direct and portfolio investment in the last six months of 2011, a fall of 64 per cent from one year earlier, the central bank said on Tuesday.

In the July-December 2010 period, investment totalled $1.06 billion, a statement from State Bank of Pakistan said.

During 2011, violence in Pakistan's biggest city and commercial hub Karachi, a Taliban insurgency in the country's northwest and chronic power shortages have put off long-term investors, analysts say.

“A combination of security and economic issues has put off investors from investing in Pakistan,” said Mohammed Sohail, chief executive at Topline Securities Ltd.

Out of the total investment, foreign direct investment fell 37 per cent in July-December 2011 to $531.2 million from $839.6 million in the final six months of 2010, the State Bank of Pakistan said.

At least 400 people were killed in July and August last year in violence in Karachi, and investors have been shunning the country's main stock exchange.

Last Thursday, the Karachi Stock Exchange's benchmark 100-share index ended at 10,909.12 points, its lowest close since Aug 29.

During the last six months of 2011, there was a net investment outflow of $144.6 million, compared with a net inflow of $221.5 million in July-December 2010, the central bank said.