The economy of Pakistan remained weak during the fiscal year 2022-23 but now the country is set to post moderate growth in the ongoing financial year. Despite it, it is still not clear whether the foreign investors will come to long-term engagement with Pakistan.
In the last fiscal foreign investor were not allowed to take profits and dividends to their countries due to Pakistans diminishing foreign exchange reserves.
The State Bank of Pakistan data shows that investors were not optimistic about the their businesses in Pakistan. They had made minimum investments to just keep running their businesses to avoid closure.
The foreign Direct Investment (FDI) for the whole fiscal year 2022-23 was the lowest in four years. FDI come down by 25 percent in the last financial year as compared to the Foreign Direct Investment in the fiscal year 2021-22.
The financial experts emphasized the government that it should have given priority to the FDI by clearing the way for profit repatriation to their headquarters abroad and measures should also have been taken to restore their confidence so as to attract more investors from abroad.
According to the foreign investors trade bodies and business advocacy platforms, multinational companies can send just 20 percent of their profits and dividends estimated at $1,5 billion in a year.
The economists of the country are of the opinion that unstable political condition of the country, rapid devaluation of rupee and economic uncertainty were also the important reasons which refrained the foreign investors to opt for investment in Pakistan.
Some multinational companies including Shell Pakistan decided to quit due to the big devaluation of local currency. The economists emphasized that after the election, new government should create the investment-friendly atmosphere in Pakistan to attract the foreign investors.