Editorial
March 2026 brought a headline that Pakistan’s economic managers were eager to circulate. Net foreign direct investment came in at 168 million dollars, up 163 percent year-on-year. The number looks impressive in isolation. In context, it changes very little.
The full-year picture remains deeply uncomfortable. Cumulative net FDI for the first nine months of FY26 stands at 1.35 billion dollars, down 27 percent from the same period last year. At the current pace, Pakistan will close FY26 with roughly 1.9 billion dollars in total FDI, below last year’s already modest figure. March was a better month inside a weak year. That is not a turnaround.
The structural reality behind these numbers is more damning than any single quarter. Over twenty-six years, Pakistan has attracted a cumulative 52 billion dollars in FDI, barely two billion dollars annually on average, and less than half a percent of GDP. The global benchmark sits at roughly three percent. India draws more than seventy billion dollars a year. Even Bangladesh attracts over three and a half billion. For an economy of Pakistan’s size, the gap is not a statistical footnote. It is a policy indictment.
The composition of current inflows tells the same story. China continues to account for more than half of all FDI, with March’s contributions concentrated in power and financial services. CPEC-linked energy and banking keep the aggregate number alive. Diversified, export-oriented investment remains absent.
The external account looks healthier than it is. The March current account surplus was driven largely by seasonal remittances, not structural improvement. Imports are rising, exports are falling, and the trade gap is widening. Reserves remain propped up by friendly-country rollovers rather than genuine inflows.
When Shell, Microsoft, Uber, and Procter and Gamble exit or retreat, no official investment campaign can paper over the message. The risks investors see in Pakistan are not temporary inconveniences. They are embedded in the system. Until that changes, better months will remain just that.
