Pakistan’s foreign direct investment (FDI) declined by 28% during the first 11 months of fiscal year 2025-26, while overall foreign investment fell by nearly 69%, according to State Bank of Pakistan (SBP) data released on Wednesday.
The central bank’s data showed net FDI stood at USD 1.623 billion during July-May FY26, compared with USD 2.267 billion in the same period of FY25.
Overall foreign investment, including private and public sector flows, dropped to USD 477.6 million during the first 11 months of FY26, down from USD 1.562 billion a year earlier.
The decline was mainly driven by continued foreign portfolio investment outflows. Foreign public investment recorded a net outflow of USD 579.6 million during July-May FY26, compared with an outflow of USD 392.7 million in the corresponding period last year.
Despite the weaker cumulative performance, Pakistan recorded a sharp improvement in foreign investment during May.
SBP data showed total foreign investment reached USD 445.9 million in May 2026, more than four times higher than the USD 102.2 million recorded in May 2025.
Net FDI during May stood at USD 214.3 million, slightly lower than USD 231.9 million in the same month last year. However, the increase in overall foreign investment was supported by a turnaround in foreign public investment, which recorded a net inflow of USD 248.2 million compared with a net outflow of USD 107.2 million in May 2025.
Foreign private investment totaled USD 197.8 million in May, compared with USD 209.4 million a year earlier, while foreign portfolio investment remained negative with a net outflow of USD 16.5 million.
The latest figures suggest that while foreign investor activity showed signs of improvement in May, Pakistan continues to face challenges in attracting sustained foreign capital, particularly portfolio investment, during the current fiscal year.
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