May 21, 2019 (MLN): The extensive fall in Pakistan’s foreign investment in the first 10 months of Fiscal Year 2018-19 (FY19) has raised serious questions over the progress of current regime.
According to the latest data released by the State Bank of Pakistan (SBP), total foreign investment in the country stood at $968 million during July-April, 2019, showing a decline of 64% as compared to the same period last year. After making bond repayments worth $1 billion, it went down to negative $22.6 million.
Foreign investors lost trust in the country as the massive Rupee devaluation remained one of their biggest concerns. Additionally, as Pakistan heavily relies on Chinese FDI, the slowdown in foreign investment from china further exerted downward pressure on Pakistan’s Foreign investment.
Portfolio investment, representing investment in equity market also painted a negative picture as it was negative $408.1 million which is 200% lower, during the first 10 month of the current fiscal year.
Similarly, Foreign Direct Investment (FDI) in the country plunged by 51.7% to $1.376 billion during the period under review, i.e. July to April 2019, as compared to FDI of $2.849 billion reported in the corresponding period last year.
In line with the trend since the announcement of CPEC, China remained the biggest investor in Pakistan as net inflows from there came out at $429 million in 10MFY19, decreasing by 75%, from $1.7 billion during July-April last year.
The United Kingdom emerged as the distant second biggest source of inflows with FDI during 10MFY19 recorded at $160 million, which is lower by 40% from $256 million. Hong Kong came in third with net inflows worth $132.7 million, followed by Japan $95.8 million, UAE $83.6 million, South Korea $75.8 million and United States $75.7 million.
Highest outflow was to the US at $231.5 million, followed by Luxembourg $106.7 million with the two accounting for 83% of the total FPI.
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