Foreign direct investment to Pakistan slumps 51% in first seven months of FY26

Foreign direct investment in Pakistan fell 51% in the first seven months of the current fiscal year, according to data released by the State Bank of Pakistan, underscoring persistent challenges in attracting overseas capital.

Net FDI stood at $694 million during July-January FY26, down from $1.429 billion in the same period of FY25, a decline of $735 million, the central bank said.

Total inflows during the period amounted to $2.1 billion, while outflows reached $1.1 billion.

On a month-on-month basis, FDI also dropped sharply. Investment fell 51% to $111 million in January 2026, compared with $226 million in January 2025.

Portfolio investment also remained under pressure, recording a net outflow of $287 million during the July-January period of FY26. The negative trend reflects continued volatility in foreign investment in Pakistan’s domestic equity and debt markets.

Overall foreign investment — comprising FDI, portfolio investment and foreign public investment — declined 65% during the seven-month period. Total inflows fell by $967 million to $517 million, compared with $1.484 billion recorded in the same period of the previous fiscal year.

Analysts said global economic uncertainty and domestic macroeconomic adjustments remain key factors affecting foreign investor sentiment toward Pakistan. They added that long-term, investment-friendly policies would be necessary to attract sustained foreign capital inflows.

Separately, Pakistan has received $11.923 billion in inflows under the Roshan Digital Account (RDA) initiative since its launch in September 2020. In January 2026, RDA inflows rose slightly to $216 million, up from $213 million in the previous month, according to central bank data.