The overall foreign investment in Pakistan, comprising foreign directinvestment (FDI), portfolio investment and foreign public investment soaredby 176 percent from July to January of the current financial year 2021-22as compared to the similar period of the last financial year.
According to the State Bank of Pakistan (SBP), the country’s total foreigninvestment surged to $1.817 billion in July-Jan of FY22 compared to $659million in the same period of FY21, showing an increase of $1.158 billion.The surge in foreign investment has been attributed to the inflows in SukukBonds and financial, energy and communications sectors.
FDI stood at $1.167 billion for the period from July to January FY22,compared with $1.048 billion in the corresponding period of the last fiscalyear. A major investment landed into the financial businesses as foreigncompanies invested $230.6 million in this sector in July-January FY22. Itwas followed by communications with $174.9 million and oil and gasexploration sector with $161.8 million in FDI, respectively.
According to SBP, China remained the largest investor with a net FDI of$360.4 million in the seven months of FY22, compared with $432.6 millionduring the corresponding period last year. United States remained thesecond-largest investor with a net FDI of $168.9 million in July-JanuaryFY22, compared with $77.9 million invested by US firms last year.
The biggest source of foreign investment in Pakistan is the China-PakistanEconomic Corridor (CPEC). Under CPEC, Pakistan and China have initiatedvarious projects such as the national-level modernisation of roads and railinfrastructure, new optical fibre connecting Pakistan with China,development and commercialisation of Gwadar port and smart port city, foururban mass transit projects in major cities and nine special economic zones.
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Pakistan has recently issued Sukuk bonds in the international market tobuild its depleting foreign exchange reserves, the foreign publicinvestment recorded 724 percent growth. Foreign public investment rose to$958.3 billion in July-Jan of FY22 as against an outflow of $153.5 millionin the corresponding period of the last fiscal year.
During the period under review, portfolio investment continued to registera downward trend and declined by 30.6 percent with an outflow of $307million. The net foreign investment stood at $1.817 billion in the sevenmonths of FY22, data issued by SBP showed.
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