KARACHI: Following a net divestment in December 2022, foreign direct investment (FDI) more than doubled to $222 million in January, up from $110 million in the same month last year.
According to the latest data released by the State Bank of Pakistan on Monday, FDI increased primarily due to inflows from China and Japan.
Due to persistent political and economic uncertainties, FDI inflows fell 44.2 percent to $683.5 million in the first seven months of this fiscal year, compared to $1.22 billion in the same period last year.
In January, FDI inflows were encouraging, following a net outflow of $17 million in December 2022. However, inflows from China ($68.4 million) and Japan ($59.7 million) accounted for more than 57 percent of total FDI in January.
During the first seven months, China and Japan invested $200.2 million and $134 million, respectively. Other significant inflows during the period came from Switzerland ($106 million) and the UAE ($83 million). The largest net outflow from Australia, however, was $231 million in 7MFY23.
Plunges 44pc in 7MFY23
Experts see no hope for increased FDI while the country remains politically and economically unstable. At the same time, one of the PMLN-led coalition government’s top ministers recently stated that Pakistan has already defaulted, sending a negative signal to the entire world.
In practice, Pakistan has not yet declared sovereign default, which means that no foreign payments have been delayed by banks or the country.