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FDI slows to eight-month low

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The net Foreign Direct Investment (FDI) in different sectors of Pakistan’s economy like energy, telecom and banking sectors slowed down to an eight-month low at $89.9 million in July – the first month of current fiscal year 2021-22, according to the central bank.

“The drop in the net inflows on account of FDI was witnessed as local projects being run on the foreign investment made higher outward payments to their headquarters during the month,” Pak-Kuwait Investment Company (PKIC) Head of Research Samiullah Tariq said.

Moreover, inflows from the second largest global economy, China, dulled during the month due to a temporary lull in the second phase of the China-Pakistan Economic Corridor (CPEC) and Belt and Road Initiative. The gross inflows of FDI amounted to $176.3 million in July 2021 which was partially higher compared to $168.7 million recorded in the same month last year. However, the gross outflows more than doubled to $86.4 million in the month under review compared to $40 million in the corresponding month last year. Accordingly, the net inflows dropped to eight-month low at $89.9 million, according to the State Bank of Pakistan’s (SBP) data.

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