China's $255m divestment in January drives Pakistan's FDI into negative territory

February 19, 2024 (MLN): Having previously held the position as the leading foreign investor in Pakistan every month, China has now transitioned to divesting $254.9 million as of January 2024, according to data released by the State Bank of Pakistan (SBP).

This is the primary reason for the country reporting a foreign direct disinvestment of $173.2m in January, compared to the direct investment of $211.1m observed in December 2023.

However, China still holds the status of the majority proportion (30.01%) of direct investments in the country during 7MFY24, despite experiencing a substantial decline of 51.48% YoY, compared to the figure of $426.46m in SPLY.

Germany emerged as the largest investor in Pakistan in January 2024, with a net direct investment of $22.39m, followed by the United Kingdom and Hongkong which invested $19.87m and $15.97m respectively.

During Jul-Jan FY24, Hongkong remained the largest investor, followed by the United Kingdom and the United States with net FDI of $206.93m, $141.49m, and $70.52m respectively.

Total FDI in 7MFY24 stood at $689.47m, down 21.36% YoY compared to FDI of $876.78m in 7MFY23.

United Kingdom’s contribution in net FDI stood at $141.49m (20.52%) in the 7MFY24, up by 0.51% YoY compared to $140.78m in SPLY.

The third major investor during 7MFY24, United States’s share was 10.23% with a direct investment of $70.52m, growing by 9.17% YoY.

Other major important investors were the Netherlands, Singapore and China with a net FDI of $53.66m, $48.99m, and $37.92m respectively during 7MFY24.

The Foreign Portfolio Investment (FPI), which represents an investment in the equity market (both direct and indirect) during January stood at positive $25.46m.

On a cumulative basis, FPI showed an investment of $96.47m during 7MFY24, against a divestment of $1.03bn in the SPLY.

On a cumulative basis, within 7MFY24, total foreign investment was reported at $785.94m as compared to foreign divestment of $148.77m incurred in the corresponding period last year.

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