The economic managers are all set to see the flow of foreign investment in the economically-troubled country accumulating beyond $ 3 billion, highest during the last six fiscal years.
At the same time, however, the outgoing FY14 is likely to see the inflow of much-needed foreign direct investment (FDI) dipping to the lowest ebb unprecedented in the past five-year rule.
Attributed chiefly to lack of investors’ confidence the inflow of foreign investment in the crises-hit Pakistan was recorded at the lowest ebb of $ 2.66 billion in FY09, $ 2.08 billion in FY10, $ 1.97 billion in FY11, $ 707.8 million in FY12 and $ 1.58 billion in FY13.
This year, however, the offshore investors are counting on what a central banker said the country’s improving macroeconomic indicators as was indicated by the oversubscription of the government-backed Eurobond issue.
Thursday witnessed the State Bank of Pakistan (SBP) reporting that the much-needed inflow of foreign investment in the country during the first 10 months of current fiscal year stood at $ 2.97 billion.
This shows an encouraging increase of $ 1.702 billion or 133 percent when compared with an investment of $ 1.27 billion the country had received during the last financial year’s corresponding period.
The analysts cite a successful issuance of Eurobonds, which fetched the dollar-hungry PML-N led federal government a beyond-the-target $ 2 billion, as a major driving force behind the up tick.
“Duly endorsed by the International Monetary Fund and World Bank the country’s improving macroeconomic indicators are all the more credible,” a central banker told Pakistan Today.
The banker said other positives like attainment of the IMF programme objectives and a substantial recovery in the country’s overall law and order situation had restored the investors’ confidence in the country and its government’s reforms-based policies.
The period under review saw the foreign public investment rising to $2.05 billion, up $1.86 billion or 955 percent as against $ 195 million of last year. This includes an inflow of $ 1.99 billion the country received during the month of April under the head of debt securities: Eurobond issue.
The central bankers though tend to play safe by not quoting a figure, the country is all set to attract more than $3 billion by the end of this fiscal year. “Let’s hope for the best,” remarked the banker.
On the flip side, the foreign private investment inflows in the country contracted by $167 million to $919 million compared to FY13’s $1.08 billion.
What may be worrisome is the fact that the economy-driven policies of the PML-N government are yet to attract the foreign direct investment (FDI) that during July-April FY14 stood the lowest at $750.9 million.
While the outgoing FY14 is to see two more months to go, the FDI inflows seem less likely to match last year’s $862.3 million mark. The FDI inflows were recorded at $3.71 billion in FY09, $2.1 billion in FY10, $1.6 billion in FY11, $820 million in FY12 and $1.4 billion last year in FY13.
Even the country’s booming stocks market could manage to receive reduced investment of $ 168.2 million from offshore investors during the months under review. The portfolio investment last year was calculated at $ 219.4 million, down $ 23 percent against this year.