Net FDI falls over 26% in first two months of FY23

Net FDI falls over 26% in first two months of FY23

Net FDI falls over 26% in first two months of FY23

As revealed by the state bank of Pakistan, FDI (Foreign Direct Investment) in Pakistan fell by 26.1% during the initial 2 months of ongoing FY23. It clocked in at just $169.5 million.

In comparison to the previous year, this figure was $229.5 million, i.e. reflecting a $60 million decline. During July and August in the current fiscal year, FDI inflows were $247.8 million while the outlows are witnessed to be $78.2 million.

Also check; Pakistan Economy to Slow Down in FY2023: ADB

Throughout August, Net FDI amounted to $110.7 million which reflect a 12% decrease in August 2022.

For the time being, the two month of the current Fiscal year, the overall Chinese investment in the country dropped down sharply by 31%. When compared to the same month results in the previous year, China had been the 2nd largest investing country that accounted for total share of 19.4% with $32.7 million net FDI. The net FDI in the previous year was $47.5 million.

Similarly, UAE emerged as the 2nd largest investor with $25 million FDI in comparison to $11 million FDI in the past year, representing an increase of 141%. Yet accounting for 15% of the total share.

During 1st 2 month of the 1st quarter of the current fiscal year, the energy sector in the country has also attracted the major 47% share of investment, i.e. around $80 million. This has been followed by financial sector and communication, i.e. $51 million and $25 million.

The development has been witnessed at a time when the downfall in the country increases, making an effort to increase the foreign exchange reserves via non debt-creating inflows.

IMF has recently given $1 billion to Pakistan as tranche of the extended fund facility, meanwhile China has rescheduled the loan, letting the investment remain elusive.

According to SBP, Saudi fund for development also confirmed the rollover of $3 billion.