Foreign investment in Pakistan soars 81% to $385 million in Sept

Pakistan recorded Foreign Direct Investment (FDI) of $385 million in September, 81% higher than the $213 million received in the same month last year, according to the latest data from the State Bank of Pakistan (SBP) shared on Monday.

Several factors contributed to this increase. Firstly, the government has implemented a flexible exchange rate system and removed various trade barriers to enhance competitiveness and expand the export base.

Reforms in the regulatory framework under the IMF program, along with a renewed focus on human capital investment and a consistent, investment-friendly regulatory regime, are also expected to attract even more FDI and private investment.

For the quarter ending September 30, Pakistan received a total of $771 million in FDI, up 48% from the corresponding period last year.

The highest inflow of FDI during this quarter came from China, contributing $404 million. This was followed by Hong Kong with $99 million, the United Kingdom with $72 million, and the USA with $29 million.

Despite these positive trends, the IMF has noted that business risks in Pakistan remain elevated due to the potential for the economic program to go off-track and the country’s challenging security situation, which could negatively impact FDI.

Authorities have been proactive in phasing out previous exchange restrictions and multiple currency practices, although there is still room for further reforms. These efforts are part of a broader strategy to ensure sustainable economic growth and stability in Pakistan.