The country’s total foreign investment declined by $2.629 billion in last 11 months of the current fiscal year which is 31.6 percent lower than 2014-15, the data of State Bank of Pakistan (SBP) said on Tuesday.
The total foreign private investment of the country stood at $1.685 billion lower, 2.1 percent or $36.5 million, while the portfolio investment of the private sector remained at $881.6 million up by 315.4 percent or $669.4 million.
Total FDI during July-May 2014-15 was $3.844 billion.
“After improving ratings from the international rating firms like Moody’s and Standard and Poor, the Pakistan’s foreign investment will shoot up in near future,” said Sohail, analyst at a brokerage house.
“Once China started pouring investment in the country, the trust of most of the foreign countries will enhance and they will invest in Pakistan,” he added.
The foreign public investment of the country declined to $9.44 million down by 55.5 percent compared to $2.123 billion recorded in the same period last year. All amounts have been received through portfolio investment. The State Bank reported that total foreign inflows, including the foreign debt securities, declined to $1.178 billion in terms of percentage the total inflows jumped by 55.5 percent.
The country has received total FDI of $42.2 million only in the month of May 2015, which was stood at $734 million in the same month in 2014. On the head of total private investment, the country received $35 million in last month, while the data shows that the SBP faced an outflow of $7 million.
The local bourses have received a portfolio investment of $41.9 million in May 2015, compared to $58.9 million in the same period last year. In the portfolio investment from the public sector, the local stock markets received an amount of Rs $7.2 million, which was stood at $62.8 million in May last year.
The International Monetary Fund (IMF) recently praised the government’s economic policies while Moody’s appreciated Pakistan’s efforts to reform economy despite disruptive political challenges and security issues. However, foreign investments did not show any positive sign. The Moody’s a week earlier enhanced the ratings of Pakistani investment bonds to B3 from Caa1 in foreign currencies abroad, while the standard and poor also appreciated Pakistani economy by enhancing its ratings. Most foreigners are reluctant to invest in Pakistan due to security concerns, except China, UAE and some other countries. In fact, the highest FDI worth $228 million was received from United States of America during the eleven months. Other top investors were China ($218 million), the UAE ($209 million) and Italy ($105 million).
The highest net outflow of FDI during the period under review was from Saudi Arabia which withdrew $116.8 million. The country has been struggling hard to improve its external account and this year trade deficit has been shrunk slightly.
