FDI Surge in Pakistan Reaches $904.3 Million in FY25

Foreign Direct Investment (FDI) plays a crucial role in the economic development of any country, and Pakistan is no exception. In recent years, the nation has been striving to attract more foreign investments to boost its economy. According to the latest data released by the State Bank of Pakistan (SBP), net FDI in Pakistan has seen a remarkable increase of 32.3% during the first four months of the fiscal year 2025 (FY25), reaching a total of $904.3 million. This surge in investment is a positive sign for the country's economic landscape.

During the period from July to October FY25, the total FDI inflows amounted to $1,242.5 million, while outflows were recorded at $338.2 million. This indicates a significant improvement compared to the same period last fiscal year, when net FDI was only $683.5 million. However, it is important to note that October 2024 alone saw a net FDI of $133.2 million, which reflects an 18% decrease compared to $163.3 million in October 2023. Additionally, on a month-to-month basis, FDI experienced a sharp decline of over 65%, dropping from $385 million in September 2024.

China has emerged as the largest source of investment during this period, contributing $414.5 million, which constitutes 46% of the total net FDI. This marks a significant increase of more than 100% compared to the $207.1 million invested during the same timeframe last year. Following China, Hong Kong has also made its mark as the second-largest investor, with net FDI of $99.7 million, reflecting a 43% increase from $69.9 million last year, representing 11% of total inflows.

The power sector has attracted the largest share of FDI, receiving $414.5 million, which is 46% of the total FDI. This is followed by the financial business sector, which garnered $189.6 million, and the oil and gas exploration sector, which attracted $103.8 million during the same period.

The rise in FDI in Pakistan is a promising development that could lead to enhanced economic growth and job creation. While the overall figures are encouraging, the decline in October's FDI highlights the need for continued efforts to maintain investor confidence. As the government works to create a more favorable investment climate, it is essential for stakeholders to remain vigilant and proactive in addressing any challenges that may arise. The future of Pakistan's economy may very well depend on how effectively it can harness and sustain this influx of foreign investment.