Foreign direct investment falls by 30 percent in 8 months: SBP

KARACHI: The net inflow of foreign direct investment (FDI) has declined by 30 percent during the first eight months (July-February) of the current financial year 2020-21 owing to significant increase in outflow of the investment during the period under review.
According to data released by State Bank of Pakistan (SBP) on Wednesday, the FDI fell to $1.3 billion during first eight months of the current fiscal year as compared with $1.85 billion in the corresponding months of the last fiscal year.
The inflows under this head witnessed a decline of 16 percent to $1.98 billion during July-February 2020-21 as compared with $2.36 billion in the corresponding period of the last fiscal year. However, outflow under this head increased by 35 percent to $683 million during the period under review as compared with $507 million in the corresponding period of the last fiscal year.
The overall inflow of private foreign investment fell by 43 percent to $1.04 billion during the first eight months of the current fiscal year as compared with $1.83 billion in the corresponding period of the last fiscal year.
The portfolio investment from the equity market witnessed massive outflows during the period. The portfolio investment saw an outflow of $256 million during the first eight months of the current fiscal year as compared with outflow of $26.3 million in the same period of the last fiscal year.
The foreign public investment recorded outflow of $132 million during the first eight months of the current fiscal year as compared with inflows of $2.16 billion in the corresponding period of the last fiscal year.
China, Netherlands and Hongkong remained the top three investors in Pakistan with net FDI of $494 million, $117.8 million, and $106.3 million respectively.
In the month of February 2021, the country fetched $155 million worth of net foreign investment with China emerged as the largest direct foreign investor in Pakistan, with a net direct investment of $91 million, followed by UK and Germany who invested $11.5 million and $8.5 million net respectively, according to SBP data issued.
The FDI from China and Hongkong was 25 percent and 20 percent lower in July-February FY21, compared to the net inflows of $654.8 million and $134.3 million respectively in the same period of FY20. While the inflows from the Netherlands were 60 percent higher when compared to the inflows of $73.5 million during July-February FY20.
On the other hand, investors from Norway showed the largest disinvestment of $31.6 million during 8MFY21, however, during the corresponding period last year, the country invested $288.5 million as FDI.
Other important investors were the United Kingdom (UK), United States (US), and Malta with a net FDI of $95.4 million, $78.9 million, and $65.3 million respectively. The Inflows from the US and UK surged by 30% and 18% YoY respectively when compared to Jul-Feb FY20 while the inflows from Malta recorded a decline of 56% YoY in 8MFY21. – TLTP