Foreign portfolio investment posts USD 944 million net outflow in FY26

Private and public foreign portfolio investment (FPI) recorded net outflows of USD 550.3 million and USD 393.5 million, respectively, during July-March FY2026, according to the Economic Survey released on Thursday.

Private-sector FPI outflows were primarily linked to the equity market, where foreign investors booked profits following strong gains at the Pakistan Stock Exchange and adjusted their exposure to emerging markets amid global financial market volatility.

The outflows accelerated in the third quarter as the Middle East crisis temporarily increased global risk aversion. Public-sector FPI outflows mainly reflected scheduled debt repayments and changing debt market conditions, including a narrowing interest rate differential following reductions in domestic policy rates earlier in FY2026, the survey said.

However, Pakistan’s return to international capital markets in April and May 2026 marked a significant positive development. The country raised USD 750 million through a three-year Eurobond issued under the Global Medium-Term Note (GMTN) program. The deal was upsized through a greenshoe option, reflecting strong demand from global institutional investors.

Pakistan also completed its inaugural Panda Bond issuance in China’s onshore capital market, raising RMB 1.75 billion, equivalent to about USD 250 million. The issuance attracted strong investor demand and broadened the country’s access to non-dollar financing sources.

Together, the Eurobond and Panda Bond transactions demonstrated renewed investor confidence in Pakistan’s economic outlook, reform agenda and external repayment capacity. The issuances also helped re-establish Pakistan’s presence in global capital markets, diversify its investor base, and support financing for sustainable and climate-resilient infrastructure.