Pakistan FDI halves to $186 million in September

Pakistan’s Foreign Direct Investment (FDI) fell by over 50% year-on-year in September, representing the country’s persistent struggle to attract foreign investors.

According to data released by the State Bank of Pakistan (SBP) the FDI fell by 56% year-on-year to $186 million, compared to $417 million in the same month last year.

It represents that foreign investors took out more money than what they invested in September.

Month-on-month, the FDI went up by a meagre 6% — from $175 million in August.

The FDI in first quarter of fiscal year 2026 (July-September) stood at $568.8 million, 34% less than $864.6 in the same period last year.

The total FDI inflow in September stood at $305.9 million and outflows $120.3 million. Last year, the inflows were $612 million and outflows $194m.

China remained the biggest source of FDI in September with $89.3 million. It was followed by $49 million from the United Kingdom, $37.8 from Hong Kong, and $23.7 million from the Netherlands.

German investors repatriated the most investment with outflows of $25.4 million.

Foreign Portfolio Investment also posted negative trends, recording a net outflow of $46.7 million in September, compared to an outflow of $47.5 million in the corresponding month of FY25.

Negative foreign investment

The SBP data showed that foreign investors sold more of the bonds and equities than bought resulting in an outflow of $47 million.

The total foreign investment —which includes FDI, portfolio investment, and foreign public investment — showed a net outflow of $361.1 million due to a one-time payment of $500 million to the investors of Euro bond.

The bond, meant to raise funds from global investors, was issued in 2015 with a 10-year tenor and matured on September 30.

The total foreign investment in September 2024 was $446.9 million.

Pakistan attracted $2.46 billion in FDI during FY25, slightly up from USD 2.35 billion in FY24.

Experts point to Pakistan’s challenges in ensuring contract enforcement, frequent changes in tax regimes, and delays in the implementation of energy and infrastructure reforms as key deterrents to foreign investment.