July 22, 2021 (MLN): Signifying the strong bilateral trading and investment relations that have been growing over the years, China has retained the top position as a foreign direct investor in Pakistan during FY21, with a net direct investment of $757.9 million, followed by Hongkong and the United States that invested a net $157.2 million and $155.5 million, respectively.
Figures compiled by the State Bank of Pakistan (SBP) revealed that in the month of June’21 alone, USA, China, and Hongkong appeared as the top three investors in Pakistan, with a net FDI of $45.1 million, $32.1 million, and $19.2 million, respectively.
Cumulatively, the net FDI from China was 10% lower in FY21, compared to the net inflows of $846.6 million in FY20, as Covid put brakes on world economy as well as inflows into projects under China-Pakistan Economic Corridor (CPEC). While the net inflows from Hongkong witnessed around an 18% decline when compared to the investment of $190.7 million recorded during FY20.
On the other hand, investors from the USA showed confidence in Pakistan’s economy as its net FDI surged by 57% during FY21 compared to the investment of $99.2 million observed in FY20.
Other important investors were the UK, and the Netherlands with a net FDI of $143.5 million and $107.1 million, respectively during FY21. The net inflows from the UK surged by 20% compared to FY20, while the net FDI from the Netherlands plunged by 20% from $133.2 million reported in FY20. The net FDI from the UAE, which is the second-largest trade partner of Pakistan, clocked in at $102.1 million compared to the net outflow of $44 million from Pakistan in FY20.
Moreover, Foreign Portfolio Investment (FPI), which represents an investment in the equity market has shown a positive picture, as net FPI inflows during FY21 recorded at $211.5 million, against outflow of $281.7 million in FY20. The UAE emerged as the biggest contributor of portfolio investment during the period, as it poured in $161.4million during FY21, followed by the Singapore with $32.5 million.
Meanwhile, USA appeared as the largest withdrawal of portfolio investment with $189.5 million during FY21.
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