KARACHI: Foreign direct investment (FDI) in Pakistan increased 2.4 percent to $2.237 billion in 10 months of the current fiscal year, the central bank data showed on Tuesday, mainly on the back of energy and construction projects.
However, FDI flows dropped to $143.7 million in April from $179.7 million in the corresponding period of the last fiscal year.
Analysts expect direct investment to remain largely influenced by energy and infrastructure projects related to China-Pakistan Economic Corridor.
“We think FDI will be driven primarily by energy-sector projects, as in recent years. However, the outlook for FY19 will depend on how the policymakers tackle external-sector challenges, in our view,” Bilal Khan, a senior economist at Standard Chartered Bank said.
The government sees net FDI for the fiscal year 2017/18 to reach nearly $3.7 billion.
FDI stood at $2.746 billion in FY18, compared with 2.305 billion in the previous year.
The State Bank’s figures showed that China remained the largest source for direct investment in Pakistan. The country attracted $1.414 billion in FDI from the Chinese firms in July-April FY18, compared with $934.8 million a year ago. These investments mainly concentrated in power and construction sectors.
Net inflows in the power sector rose to $749.9 million during July-April FY18 from $514.5 million last year.
Construction-related businesses fetched $621.7 million worth of foreign investments in 10 months of this fiscal year as against $262.4 million recorded in the corresponding period of FY17.
However, direct investments in financial and oil and gas exploration sectors remained relatively moderate during the period under review.
Foreign companies invested an amount of $271.5 million in the banking sector, compared with $252.9 million a year earlier.
FDI in exploration and production stood at $164 million during July-April FY18, compared with $107.8 million in July-April FY17.
The SBP’s data revealed that total foreign investment increased 64.7 percent to $4.577 billion in 10 months of FY18.
However, foreign portfolio investment at Pakistan Stock Exchange experienced an outflow of $110.8 million in July-April FY18, compared with $368.3 million in the same period of last year.