USA Remains Second Major Investor in Pakistan After China

With the ongoing political unrest between USA and Pakistan, investment inflows from the former continue to come in Pakistan. Investments from the US remained the second highest at $530 million after China, which retains its top position with inflows of $972 million.

According to statistics from State Bank of Pakistan (SBP), contribution of USA based investors was high in foreign portfolio investment with a value of $466 million along with investment in real sector of around $63.5 million, during the period of July to December 2017.

On the contrary, investment inflows from China were largely focused on sectors such as energy and infrastructure, at around $969 million, during the first half of financial year 2017-18. The share of portfolio investment was merely $3.2 million during the same period.

Foreign Portfolio Investment (FPI) is made in equity and debt securities, and is a major component of net Foreign Direct Investment. On the other hand, Foreign Direct Investment (FDI) is carried out in real sector with long-term impact on economy and industries of the country.

Countries and Sector with Significant Net FDI

Besides China and USA, major contributors to the net FDI are Malaysia with $117 million, Hungary with $48 million and Netherlands with $30 million, respectively, during the first half of financial year 2017-18.

Sectors that witnessed investment inflows are: power with $535 million, construction with $349 million and oil/gas exploration and production with $104 million.

Net FDI Records 71% Growth in Jul-Dec

The net FDI witnessed a substantial growth of 71 percent in the period of July to December 2017, which is the first half of financial year 2017-18. Over all, the country received a net FDI of $3.7 billion between July to December as compared to $2.16 billion net FDI reported in the same period of last financial year.

The growth in net FDI was witnessed due to significant inflows in FPI which surged to $2.45 billion after the government floated foreign bonds in the international market.

FDI recorded a slight decline to stand at $1.38 billion during the first half of financial year 2017-18.​

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