FDI Plunges by 35% in 9 Months of FY21

According to data released by the State Bank of Pakistan (SBP) on Monday, foreign direct investment (FDI) fell by 35% to $1.395 billion in July-March FY21, compared to $2.15 billion in the same period the previous fiscal.

In March, inflows totaled $167.6 million, down 40% from $278.7 million in the same month last year. However, the FDI graph indicates that the overall trend is on the decline, as inflows in March this year were marginally higher than in February when they were $155 million.

Since plummeting by 30 percent in the first eight months of the current fiscal year, FDI has now fallen by 35 percent after a 40 percent drop last month. However, the external situation is much better, with a current account surplus of $881 million in the first eight months of FY21 and SBP reserves at a four-year peak.

According to the most recent statistics, inflows from China totaled $650.8 million in the first nine months of this fiscal year. For many years, China has been Pakistan’s largest investor, but inflows have decreased this year. In the same period of last fiscal, the inflow from China was $859.3m; the decline this year was 24pc.

Inflows from Hong Kong also fell to $105.7 million, down from $135 million in the previous fiscal year’s same stretch. Inflows from the United Kingdom increased to $105 million, up from $90.4 million previously. FDI from the United States rose to $88 million, up from $65 million the previous fiscal year.

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