KARACHI – Net foreign investment in Pakistan rose 44.3 percent to $1.18 billion in the first seven months of the fiscal year 2010/11, because of an increase in foreign portfolio investment, the central bank said on Thursday. This compared with net foreign investment worth $818.9 million in the same period last year.
Out of the total foreign investment, foreign direct investment fell 16 percent in the July and January period to $947 million, from $1.13 billion in the same period last year, the State Bank of Pakistan indicated. A shaky security situation, with the country’s northwest ravaged by terrorism, coupled with chronic power shortages, has put off investors to invest for a long term basis, analysts indicate.
However, with emerging markets being on the radar of fund managers, Pakistan has seen a flow of foreign investment in the country’s main stock exchange. Foreign portfolio investment rose 176 percent to $234.8 million in the first seven months of the 2010/11 fiscal year compared with an outflow of $309.1 million in the same period last year.
An International Monetary Fund (IMF) emergency loan package agreed in November 2008 helped Pakistan avert a balance of payments crisis and shore up reserves.
It received the fifth tranche of $1.13 billion of the International Monetary Fund loan of $11 billion and Pakistan and International Monetary Fund authorities are scheduled to meet before June 30 to discuss the release of the sixth tranche.
