Despite the downward trend in direct investment, the country’s total foreign investment increased by 124.8 per cent to $113.9 million owing to higher inflows of portfolio investments in July 2016, data released by the State Bank of Pakistan (SBP) said on Tuesday.
The direct investment was slightly down by 14.6 per cent to $63.3 million in the first month of the current fiscal year compared with $75.3 million received in July 2015. The direct investment was supported by oil & gas explorations, power and communications sectors with a total contribution of $28 million in 2016-17.
The biggest investment has been received of $20 million in the communications and $8.6 million in the hydel power sector, the SBP said. The SBP has also received an amount of $10 million in financial business. According to the SBP, investments have also been received in textile, chemicals, transport and other sectors.
An analyst said, “Chinese companies are still pouring investment in Pakistan in the power sector, while the government also received some investment in the communication sector last month.”
Last year, the Chinese companies invested $628 million in the power sector. Meanwhile, $265.7 million was received in the oil & gas exploration sector and $300 million in the communications sector.
The country’s total foreign direct investment increased by 61.8 per cent to $114.6 million during the month largely because of investment in the power and communication sectors, the analyst claimed.
The foreign public investment also declined by 96.2 per cent to negative $0.8 million in July this year compared with negative $20.2 million received in July 2015.
The country has recorded inflows of direct investment of $93.2 million in July 2016, but the outflows stood at $28.9 million during the same period of last year.
During 12 months of the current fiscal year, the country recorded portfolio investment of $50.3 million which was negative $4.5 million in the previous year.
It’s a good sign that direct investment is $64 million in the first month, while there is a positive trend in portfolio’s inflows because of MSCI’s upgradation of Pakistan as an emerging market, another analyst said.