Direct investment up by 5.4 pc in July-April 2015-16

• Country’s total investment declines by 77.5 pc

The direct investment of the country increased by 5.4 per cent to $1.016 billion mainly supported by power, oil and gas exploration and beverage sectors, with a total contribution of $814.8 million in July-April 2015-16.

Despite an investment of $549.9 million from Chinese companies, the country’s total investment declined by 77.5 per cent to $615.5 million in the first 10 months of the current fiscal year.

The biggest investment received is of $290.2 million in coal power, $123 million in thermal, $104.5 million in hydel power sector. The country has also received $24 million of the privatisation proceeds in thermal power, according to the State Bank of Pakistan (SBP).

“The overall investment of the country is on a declining side as only Chinese companies are pouring investment in Pakistan in the power sectors,” said an analyst.

According to SBP’s investment figures, Chinese companies have so far invested $518.1 million in the power sector while $234.8 million have been received in the oil & gas exploration sector and $61.9 million in the beverage industry.

The country’s foreign direct investment increased slightly by 5.4 per cent or to $1.016 billion during the said period only because of the Chinese investment in the power sectors, the analyst claimed.

The foreign private investment also declined by 64.7 per cent to $635.1 million in the same period, compared to $1.8 billion received in the same period last year.

The country has received only $66 million under the head of foreign investment in the last ten months of the current fiscal year, if China’s investment from the total investment is subtracted.

The country recorded inflows of direct investment of $1.762 billion in July-April 2015-16, but the outflows stood at $746 million in the same period.

During the first ten months of the current fiscal year, the country recorded portfolio investment (negative) $381.2 million which was (plus) $836 million in the same period last year.

From the public sector, the SBP recorded an outflow of an amount of $19.6 million in this period down by 102.1 per cent compared to last year’s amount of $936.9 million. The SBP has received this amount under the head of portfolio investment only.

According to analysts, the foreign investment is not coming into the country owing to political uncertainty, while the portfolio investment from local stocks is also declining.

“It’s a good sign that the direct investment is up 5.4 per cent, while there is a negative impact on our total investments only because of portfolio’s outflows,” another analyst claimed.

In April 2016, the country recorded total investment inflows of $48.3 million compared to $864.9 million in the same month last year. The country’s direct investment was recorded $58.9 million against $131.7 million in the same month last year.

According to SBP data, the chemical sector fetched $57.3 million, petroleum and refining $37 million and transport equipments $29.7 million. The petro chemical and metal products were the top sectors which withdrew an amount of $136.1 million and 48.9 million, respectively.

After China, the United Arab Emirates (UAE) was on top with an investment of $137.2 million, Hong Kong was second with an inflow of $129.4 million and Switzerland third with $72 million.

Meanwhile, Saudi Arabia withdrew an amount of $81 million from the country, the United States withdrew an amount of $75.7 million and Egypt pulled back $37.9 million.