ISLAMABAD: In March 2024, Pakistan’s foreign direct investment (FDI) landscape experienced a notable upswing, signaling a promising shift in the country’s economic trajectory.
According to the latest data released by the State Bank of Pakistan (SBP), FDI inflows surged by an impressive 51.7% month-on-month (MoM), reaching $258 million. This marked a significant leap from $170 million recorded in the same period last year.
The March FDI inflow represents the highest figure since June 2022, highlighting renewed confidence among international investors in Pakistan’s economic potential.
However, despite this positive momentum, FDI inflows for the first nine months (July-March) of the current fiscal year witnessed a modest decline of 9.7% compared to the previous year. Pakistan received $1.099 billion in FDI during this period, down from $1.217 billion in the corresponding period of the preceding year.
Pakistan has traditionally attracted approximately $2 billion in FDI annually, positioning it as a focal point for foreign investors within the region. Nevertheless, a closer look at the data reveals mixed trends, with certain key contributors experiencing fluctuations in their investment patterns.
China and the UAE, which have been significant sources of FDI for Pakistan, saw notable declines in their investment flows. FDI from China dropped to $262 million in the first nine months of FY24, a substantial decrease from $556.6 million during the same period last year.
Similarly, FDI from the UAE witnessed a significant downturn, with inflows decreasing to $27.7 million from $88.7 million previously. Despite these declines, the government remains optimistic about attracting substantial investments from the UAE, particularly under the Special Investment Framework Agreement.
However, amidst these fluctuations, other countries emerged as noteworthy contributors to Pakistan’s FDI landscape. Hong Kong’s investment surged by 46% to $26.4 million, indicating growing confidence from this region.
Meanwhile, the UK maintained its position as a prominent investor, with FDI amounting to $196.3 million. The USA also continued its investment commitment, albeit with a slight decrease to $100.7 million.
In a surprising turn, the Netherlands witnessed a remarkable uptick in investment, recording a staggering 306% increase to $6.7 million during the nine-month period.
Karachi, the economic hub of Pakistan, played a pivotal role in this FDI resurgence, attracting a diverse range of investments across sectors.
The city saw a doubling of FDI on a monthly basis in March 2024, marking a significant milestone in Pakistan’s journey towards economic revitalization.
I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.
