Pakistan's Foreign Direct Investment Grows Over 8% in First Five Months of FY24
During November alone, net FDI amounted to $131.4mn, a 12% increase when compared with the same month of the previous year
Karobar
In a significant development for the Pakistan economy, the State Bank of Pakistan (SBP) released data on Monday indicating a robust 8.1% growth in Net Foreign Direct Investment (FDI) during the initial five months of the current fiscal year (FY24), reaching an impressive $656.1 million.
The July-November FY24 period witnessed a noteworthy increase in FDI inflows, totaling $942.8 million, compared to an outflow of $286.7 million during the same period. This positive trend contrasts with the net FDI of $606.9 million recorded in the corresponding months of the previous fiscal year.
Breaking down the data for November, the month saw a 12% surge in net FDI, reaching $131.4 million, showcasing an upward trajectory from the $117 million recorded in the previous year. On a month-on-month basis, FDI experienced a 7% increase compared to the $122.46 million reported in October.
Amid these positive numbers, it is noteworthy that overall Chinese investment in Pakistan declined by over 7% during the first five months of FY24. Despite this decrease, China maintained its position as the largest investing country, contributing 35.5% of the total share, with a net FDI of $232.7 million. Hong Kong emerged as the second-largest investor, marking a 50.4% increase with a net FDI of $129.2 million, accounting for 20% of the total share.
Analyzing the sectors attracting the most investment during 5MFY24, the power sector took the lead with a substantial 51% share, amounting to $333.5 million. Following closely were oil & gas exploration ($79.1 million) and the financial business sector ($71.1 million).
This positive trend in FDI growth occurs as Pakistan addresses a shortage of dollars, aiming to bolster foreign exchange reserves through non-debt-creating inflows. In tandem with these developments, the SBP reported a surplus of $9 million in Pakistan's current account for November 2023, a remarkable turnaround from the $157 million deficit recorded in the same month the previous year.
