Pakistan's foreign direct investment (FDI) landscape experienced a notable upswing in March 2024, marking a promising turn in the country's economic trajectory.
According to the latest data unveiled by the State Bank of Pakistan (SBP), FDI inflows soared by an impressive 51.7% month-on-month (MoM), reaching $258 million, a significant leap from $170 million recorded in the corresponding period last year.
This surge in March FDI inflows represents the highest figure since June 2022, underscoring a renewed confidence among international investors in Pakistan's economic potential.
Despite this positive momentum, FDI inflows for the first nine months (July-March) of the current fiscal year witnessed a modest decline of 9.7% compared to the previous year. SBP data reveals that Pakistan received $1.099 billion in FDI during this period, down from $1.217 billion in the corresponding period of the preceding year.
Notably, Pakistan's ability to consistently attract approximately $2 billion in FDI annually positions it as a focal point for foreign investors within the region. However, a closer examination of the data unveils a mixed picture, with certain key contributors witnessing fluctuations in their investment patterns.
China and the UAE, traditionally significant sources of FDI for Pakistan, recorded notable declines in their investment flows. FDI from China plummeted to $262 million in the first nine months of FY24, marking a substantial decrease from $556.6 million during the same period last year.
Similarly, FDI from the UAE witnessed a significant downturn, with inflows dwindling to $27.7 million from $88.7 million previously. Despite these declines, the government remains optimistic about attracting substantial investments from the UAE, particularly under the Special Investment Framework Agreement.
However, amidst these fluctuations, other countries emerged as noteworthy contributors to Pakistan's FDI landscape. Hong Kong's investment surged by 46% to $26.4 million, underscoring growing confidence from this region. Meanwhile, the UK maintained its position as a prominent investor, with FDI amounting to $196.3 million. The USA also continued its investment commitment, albeit with a slight decrease to $100.7 million.
In a surprising turn, the Netherlands witnessed a remarkable uptick in investment, recording a staggering 306% increase to $6.7 million during the nine-month period.
Karachi, the economic hub of Pakistan, stood at the forefront of this FDI resurgence, welcoming a diverse range of investments across sectors. The city witnessed a doubling of FDI on a monthly basis in March 2024, marking a significant milestone in Pakistan's journey towards economic revitalization.
