Karachi: Foreign direct investment (FDI) in Pakistan has seen a remarkable 56% increase in the first seven months of FY25, signaling renewed investor confidence.
According to the latest report by the State Bank of Pakistan (SBP), FDI surged by $548 million, reaching $1.523 billion from July to January FY25, compared to $975 million during the same period last year.
While this growth is notable, Pakistan still lags behind its regional counterparts in attracting foreign investment. Despite government efforts to create a more investor-friendly environment, major breakthroughs in securing larger FDI volumes remain elusive.
To address these challenges, the Special Investment Facilitation Council (SIFC) was established, aiming to streamline investment processes and remove barriers. However, tangible results have yet to be seen.
FDI inflows in January 2025 showed significant improvement compared to the previous year. The country received $194 million, a stark contrast to the $132 million outflow in January 2024.
So far in 7MFY25, FDI has performed better than in the previous fiscal year. Pakistan recorded $2.346 billion in FDI during FY24, and with $1.5 billion already secured in just seven months, the outlook remains optimistic.
China continues to be the primary driver of FDI inflows into Pakistan. Chinese investment soared to $633.6 million in 7MFY25, compared to just $118 million in the same period last year.
Other notable investments came from Hong Kong ($154.7 million), Switzerland ($144 million), and United Kingdom ($148 million).
Despite the improvement, economists and analysts believe Pakistan’s external account instability remains a key concern for foreign investors. Uncertain economic conditions and policy inconsistencies continue to deter long-term commitments from global investors.
While the increase in FDI is a positive sign, sustaining and expanding this growth will require stronger economic reforms, policy stability, and enhanced investor confidence in Pakistan’s financial landscape.
