KARACHI: Pakistan’s total Foreign Direct Investment (FDI) has jumped to $3.925 billion in the past 11 months of the current fiscal year, which is up by 107.1 percent compared to last year receipts of $1.895 billion, State Bank of Pakistan (SBP) data revealed on Friday.

However, direct investment has declined by 27.7 percent to $1.751 billion in the July-May period of fiscal 2020-21 compared to $2.422 billion received in the same period last year.

The inflow of direct investment in May was $188.3 million compared to just $10.1 million in the same month of last year.

During the last 11 months, the major inflows were in the head of Foreign Portfolio Investment which is up by 949.5 percent to $2.458 billion compared to a negative $289.3 million received last year.

The latest data shows that inflow from China during the 11 months of this fiscal was $728.2 million, which is the highest by the country-wise investment, but down compared to $842.8 million received last year.  China has been the largest investor in Pakistan for several years, but the inflow declined this year.

The inflow from Hong Kong also declined to $138.1 million compared to $193.5 million in the same period of last fiscal. The inflows from the United Kingdom improved to $130 million compared to $87.8 million. The FDI from the United States also increased to $105 million compared to negative $25 million of last fiscal.

However, the situation on the external front is much better as the current account of 10 months of fiscal 2020-21 is surplus with $778 million and the SBP reserves have reached an all-time high this year.

Exports have been increasing as more orders are in line due to the serious pandemic situation in India and Bangladesh. The increased export proceeds and lower consumption of foreign exchange in the domestic market raised the value of the Pakistani rupee against the US dollar as it has appreciated during the last few months.

With the initiation of the China-Pakistan Economic Corridor, the inflows from China had increased manifolds in recent years despite the declining trend seen in inflows from other countries.

The federal government believes that the new cities would attract foreign investors, including overseas Pakistanis, to invest in the country.

The government also made efforts to attract foreign investments through Roshan digital accounts and by offering domestic bonds (Pakistan Investment Bonds and treasury bills) with a very high return of 10 percent. The two products started attracting foreign investment, but the size of investment is still lower than what was needed to avoid loans from International Monetary Fund, World Bank and other lenders.


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