June 18, 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 Jul-May FY21, with a net direct investment of $728.2 million, followed by Hongkong and the United Kingdom that invested a net $138.1 million and $130.5 million, respectively.
Figures compiled by the State Bank of Pakistan (SBP) revealed that in the month of May’21 alone, Netherland, China, and United Kingdom appeared as the top three investors in Pakistan, with a net FDI of $53.2 million, $19.9 million, and $11.8 million, respectively.
Cumulatively, the net FDI from China was 14% lower in 11MFY21, compared to the net inflows of $843.1 million in the same period of FY20. While the net inflows from Hongkong witnessed around an 18% decline when compared to the investment of $168.4 million recorded during July- May FY20.
On the other hand, investors from the UK showed confidence in Pakistan’s economy as its net FDI surged by 16% during 11MFY21 compared to the investment of $112.9 million observed in the corresponding period of last year.
Other important investors were the Netherland, and the United States with a net FDI of $116 million and $105.7 million, respectively during July-May FY21. The net inflows from the Netherland plunged by 6% compared to July-May FY20, while the net FDI from the US surged by 15% from $112.9 million reported in 11MFY20. The net FDI from the UAE, which is the second-largest trade partner of Pakistan, increased sharply to $92.5 million. During the same period last year, there was a net outflow of $36.2 million from Pakistan.
Moreover, Foreign Portfolio Investment (FPI), which represents an investment in the equity market has shown a negative picture, as net FPI outflows during the period under review stood at $285 million compared to the outflows of $238.5 million recorded in the same period last year. The US emerged as the biggest withdrawal of portfolio investment during the period, as it withdrew $181 million during 11MFY21, followed by the UK with $172.6 million.
Meanwhile, UAE appeared as the largest contributor in portfolio investment with $157.3 million during 11MFY21.
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