Q1 FDI slips as Chinese investment plummets
Q1 FDI slips as Chinese investment plummets

KARACHI: Foreign Direct Investment (FDI) in the country fell by 4 percent during the first quarter of this fiscal year (FY22) due to sharp fall in Chinese investment.

The State Bank of Pakistan (SBP) reported Monday that Pakistan attracted FDI amounting to $439.1 million during July-Sept of FY22 compared to $457.6 million in the same month of the previous fiscal year (FY21), depicting a decline of $18.5 million. During the period under review, FDI inflows were $665.8 million against $226.7 million outflow.

Analysts said that FDI is not showing any improvement since the beginning of the new fiscal year due to massive fall in Chinese investment.

China was the largest investor for the last several years supported by massive investment in the CPEC-related projects, however now it ranks second.

The detailed analysis revealed that the highest FDI was arrived from the United State. With a 400 percent increase, direct investment from the United State stood at $100 million during the first quarter of this fiscal year versus $19.7 million investment in the same period of last fiscal year.

FDI declines 20pc in two months

China's direct investment in Pakistan fell sharply, ie, by 50 percent during this fiscal year. China invested $77 million in the first quarter of this fiscal year versus $155 million in the corresponding period of last fiscal year.

The second component of foreign investment, ie, portfolio investment registered an outflow of $ 100.3 million during the period under review. Total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment rose sharply 323 percent during the first quarter of FY22.

Pakistan's total foreign investment rose to $1.318 billion in July-Sep of FY22 compared to some $311.6 million in the same period of FY21, showing an increase of $1.007 billion. Month-on-month basis, Pakistan received $236 million FDI during September 2021 compared to $203 million in September 2020, showing an increase of $33 million in a month.

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