Pakistan has become one of the least top attractions for international investors as a result of the political upheaval there and the global economic recession, as foreign direct investment (FDI) fell by 52 percent between July to October of the current fiscal year (FY23) on a year-over-year (YoY) basis.
Foreign direct investment in Pakistan decreased to $348 million between July and October of FY23, down from $726 million recorded during the same time the previous financial year, mostly in the real estate sector, according to figures made public by the State Bank of Pakistan (SBP).
China provided the largest investment to the nation, totaling to $74 million over the time period under consideration. UAE brought in $67 million in investment, while Switzerland and the Netherlands brought in $46 million and $37 million, respectively.
The electricity industry continued to draw in foreign investment, receiving $155 million in FDI throughout the course of the review period. The banking industry, which witnessed investment inflows of $97.5 million, came in second, while the cosmetics industry, which saw inflows of $18.4 million in the first four months of FY23, came in third.
Additionally, the foreign portfolio investment (FPI) saw a $33.87 million outflow during that time. Foreign investors withdrew $15.6 million from the equities market, while $18.2 million in capital outflows from debt instruments were recorded.
According to analysts, local and international economic and political upheaval have had an impact on investment inflows; however, after the dust has settled, inflows are anticipated to emerge in numerous economic sectors, including the equities market and debt securities.
The Pakistani government does, however, constantly welcome foreign investors. Ishaq Dar, the minister of finance, stated that the government welcomes foreign direct investment into the country and is dedicated to creating an atmosphere that is favourable to international investors.