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Foreign Direct Investment into Pakistan Shows a Decline

Image Source: Pixabay

Pakistan is experiencing a decrease in net foreign direct investment (FDI) in key sectors such as energy, telecommunications, and banking. In July 2021, the FDI inflow dropped to $89.9 million, marking an eight-month low for the country. 

An article in The Express Tribune highlighted that this decline in FDI can be partly attributed to a temporary slowdown in the China-Pakistan Economic Corridor (CPEC) and Belt Road Initiative in the recent month. 

While gross FDI inflows for July 2021 were $176.3 million, a slight increase from the previous year’s $168.7 million, the outflows more than doubled to $86.4 million compared to $40 million in the same period last year. According to the State Bank of Pakistan (SBP), the net inflow hit an eight-month low of $89.9 million. 

Notably, Singapore emerged as the largest investor in Pakistan for July 2021, injecting $16.4 million into the economy compared to a mere $2.3 million in the corresponding month last year. 

The United States followed as the second-largest investor, contributing $14.9 million to Pakistan in July 2021, up from $11.5 million in the same month last year. 

Other notable investors in July 2021 included Hong Kong with $12.3 million and China, which reduced its investment to $6.6 million from $44.1 million in July 2020. 

Sector-wise, the power sector attracted the most investment in July 2021 with $41.9 million, followed by financial services with $27 million, and oil and gas exploration with $22.4 million. 

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Image Source: Pixabay

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