Pakistan witnesses disinvestment from major countries except China in March

April 21, 2020 (MLN): Due to ongoing COVID-19 pandemic, Pakistan witnessed a severe economic blow in the form of foreign disinvestment of $1.63 billion during the month of March 2020.

In the wake of a global pandemic, most of the overseas investors cut or held back their planned investment in Pakistan. As the data published by State Bank of Pakistan (SBP), shows that among 5 top investors in Pakistan i.e. China, US, UK, UAE and Norway, all showed divestment except China during the month.

China which has been the top investors since few months due to its ongoing China-Pakistan Economic Corridor (CPEC) projects in Pakistan, its total investment into Pakistan amounted to $202.2 million, showing an increase of 24% MoM as the Chinese economy is slowly getting back to work after hitting hard by COVID-19 pandemic.

Investors from the US showed a largest disinvestment of $36.2 million during the month compared to $9 million worth of disinvestment recorded in February 2020, followed by UAE investors that pulled out $13.8 million from Pakistan during the month under review.

Next in line is Sweden and the UK as their outflows from the country stood at $ 7.8 million and 5 million respectively. If compared with the previous month, the country witnessed an inflow of $ 6.9 million from the UK and outflow of $1 million from Sweden.

During the month, Malta, Netherland, Germany and Italy are the countries where Pakistan observed a decent investment compared to other major investing partners, as they brought $18.5 million, $10.4 million, $7.2 million and $5.6 million worth of investment into the country.

Cumulatively, during Jul-March FY19, Pakistan witnessed a total foreign investment of $2.37 billion compared to $494.9 million recorded in the corresponding period of last year, marking a significant growth of 380% YoY.

On the other hand, Foreign Portfolio Investment (FPI), which represents an investment in the equity market also painted a negative picture, as net FPI outflows during the month stood at $1.9 billion against the inflows of $273.7 million in February 2020. The United States emerged as the biggest withdrawer of portfolio investment during the month, as it withdrew $36.2 million against the outflows of $19.6 million in the previous month.

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