Total Foreign Direct Investments fell from $1.857 billion in FY22 to just $427.1 million in FY23, a decrease of 77% YoY. In the fiscal year 2022-23, net FDI in Pakistan fell to $1.456 billion, a decrease of 24.8 percent YoY from the $1.936 billion recorded in the same month of the previous fiscal year.
The State Bank of Pakistan said that the decline in FDI was due to a combination of a sharp rise in outflows and a sharp fall in foreign public investment. The negative portfolio investment for FY23 totaled $1.01 billion, up from $309.5 million the previous year at the same time.
Foreign direct investment is rapidly decreasing
FDI dropped by 58% in June, totaling only $114.3 million, as the SIFC attempted to attract almost $14 billion in funding for the Diamer-Bhasha Project. Foreign direct investment in Pakistan was $271.1m in the corresponding period of the previous fiscal year.
In FY23, China surpassed all other countries as Pakistan’s top investor, pouring in a total of $475.3 million. UAE ranked second with $199.3 million and Japan ranked third with $184.4 million, according to SBP data.
There was a total of $660 million invested in the power sector, with $291 million going towards coal-based projects, according to the data. After this, $348.6 million was invested by the finance sector, followed by $150.6 million by the oil and gas exploration sector. The mining and quarrying industry lost $244.7 million in FY23, down from the previous year’s same period.
Uncertainty over the impending General Elections and the political scene may exacerbate estimates for 2023-24, according to analysts, who also claim that international and domestic economic and political instability have hampered investment inflows.
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