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FDI into Pakistan falls 50.3%

Publication Date : 16-08-2012


Foreign direct investment in Pakistan fell 50.3 per cent to US$42 million in the first month of 2012-13, compared with $84.7 million in the same month last year, the central bank said yesterday.

Foreign private investment, which includes foreign direct investment and foreign portfolio investment, rose 28.2 per cent to $70.8 million in July 2012, compared with $55.3 million in July last year.

FPI increased mainly due to a rise in foreign portfolio investment which received net inflows worth $28.8 million last month, compared with a net outflow of $29.4 million in July last year.

The country’s main stock index (KSE) has managed to restore back local investor confidence, which has led to an increase in volume in the previous few months, that has also helped Pakistan re-emerge on the radar of foreign investors.

Total foreign investment, which includes foreign private investment and foreign public investment, totaled $91 million in July, compared with $56.4 million in the same month last year.

Out of the total foreign private investment, US was on top of the list, with an investment of $30.9 million, mostly coming from foreign portfolio investment, which stood at $26.7 million, followed by United Arab Emirates, which made an investment of $11.8 million in July.

Some outflows were also witnessed in July, as Sweden withdrew $5.1 million and UK withdrew $2.2 million.

The power sector had a net investment inflow of $2.1 million in July mainly in the thermal sector, compared with a net outflow of $4.8 million in the same month last year, while telecommunications witnessed a net outflow of $0.4 million.

The country’s worsening economic environment has put-off long-term investors especially with the prevailing energy crisis, while analysts said that the deteriorating law and order situation and political instability continued to be the biggest hurdles for FDI.


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