close
Wednesday December 25, 2024

Pakistan attracts $656m in FDI inflows from July to November

By News Desk
December 19, 2023

KARACHI: The foreign direct investment (FDI) inflows rose by 8 percent to $656.1 million in the first five months of the current fiscal year, according to the central bank data released on Monday.

The direct investment in November increased by 12 percent to $131 million. The FDI inflows amounted to $122 million in the previous month. 

A man counts US dollars in a money exchange shop in Dhaka. — AFP/File
A man counts US dollars in a money exchange shop in Dhaka. — AFP/File

The SBP data showed that investment inflows from Hong Kong surged by 50 percent to $129 million in July-November FY2024, while investments from China, which accounts for the largest share of Pakistan's overall foreign direct investment, declined by 7 percent to $233 million.

The companies from the Netherlands invested $42 million in Pakistan from July to November of FY2024, a significant rise from the $8 million they invested in the same period a year earlier.

FDI inflows into the oil and gas exploration industry soared by 96 percent to $79 million in the first five months of this fiscal year.

However, the FDI in the power sector dropped by 3 percent to $334 million between July and November of FY2024. Moreover, foreign investments in Pakistan's financial businesses plunged by 35 percent to $71 million. Positive developments indicate that FDI will continue to improve in the coming months.

Pakistan expects to receive the next tranche of around $700 million from the existing International Monetary Fund’s $3 billion loan programme if the Fund’s executive board approves it next month.

Both domestic and foreign investors paid close attention to economic data, understanding that the outcomes of or delays in the elections could affect the political climate as well as the IMF programme. It is expected that investors will not be affected by political developments as long as the agenda for economic reforms continues, according to analysts.

In a noteworthy development, Aramco announced its intention to acquire a 40 percent stake in a Pakistani Gas & Oil Company. “While the transaction size may not be colossal, it signals a positive turn as the country attracts a substantial FDI after a prolonged hiatus, with a major global player expressing confidence in a Pakistani enterprise,” Chase Securities said in a note last week.

During the seventh Special Investment Facilitation Council (SIFC) executive committee meeting, a plan for state-owned enterprise privatisation was carefully examined. SIFC reaffirmed its commitment to implementing the reform agenda by providing clear instructions to ensure that transactions are completed within the specified time frames.