In October, foreign direct investment in Pakistan dips 62% to $95 million

Karachi: In October 2022, net foreign direct investment (FDI) in Pakistan fell 62% to $95 million, compared to $247.3 million in the same month of the previous year, according to data released by the central bank on Monday.

The net FDI was 13% greater than the $84 million recorded in September 2022.

In addition, during 4MFY23, net FDI fell 52% year-over-year (YoY) to $348 million. This compares to $726 million for July-October of FY2022.

During July-October of FY23, FDI inflows totaled $514.5 million, while outflows totaled $166.2 million.

A breakdown reveals that China, the largest investor, decreased its total investment by 27% in the first four months of the fiscal year 2022. China contributed 14.5% of the overall share with net foreign direct investment of $74.8 million, compared to $102 million invested during the same time last year.

The UAE was the second-largest investor, with a 13% stake. Its investments in Pakistan increased by 27.7% to $69 million, compared to $54 million the previous year.

From July to October, the energy sector attracted the largest proportion of investment, approximately 30% or $155.5 million, followed by the financial business sector with $97.5 million and oil and gas exploration with $18.5 million.

Despite $1.5 billion in FDI inflows from the Asian Development Bank and $1.3 billion in financial support from the World Bank, foreign direct investment remained stagnant.

In October 2022, Pakistan’s current account deficit widened by $204 million, or 56%, to $567 million, compared to September’s $363 million, month-on-month (MoM), while it shrunk by 68% year-on-year (YoY), mostly due to a persistent slowdown in imports and remittances.

According to data provided by the State Bank of Pakistan (SBP) on Monday, during the first four months of the current fiscal year (4MFY23), the current account deficit decreased by 47 percent year-over-year to $2.82 billion from $5.305 billion during the same period of the previous fiscal.