FDI falls 31pc to $1.409bn in July-April

KARACHI: Pakistan’s foreign direct investment declined by 31 per cent in the first 10 months of the current fiscal year, according to figures cited in a State Bank balance sheet, underlining the country’s continued difficulty in drawing overseas investors.

The data showed that net FDI during July-April stood at $1.409 billion, down from $2.035bn in the same period of FY25. The slowdown was also evident in April, when total inflows came in at $54 million, compared with $179m in the same month last year.

April’s figures also reflected uneven investment patterns across countries. Investment from China during the month amounted to $61m, which was higher than the overall net inflow of $54m. The gap was due to withdrawals by some countries during the month, even as others continued to invest.

China remains the largest source

China remained Pakistan’s biggest foreign investor during the July-April period, contributing $740m, which accounted for more than half of total inflows. However, that was lower than the $1.04bn recorded from China in the corresponding period of the previous fiscal year.

China has invested heavily in Pakistan for more than a decade and has become the country’s largest trading partner. After China, Hong Kong contributed $281m during the 10-month period. Other notable inflows came from Switzerland, which invested $170m, and the United Arab Emirates, which invested $169m.

At the same time, the largest outflow was recorded from Norway, which withdrew $365m. In the same period of the previous fiscal year, Norway had posted a small investment of $5m.

Sector-wise investment trends

Sectoral data showed that the power sector attracted the highest amount of foreign investment during the first 10 months of FY26, receiving $785.6m. The financial business sector, largely made up of banks, drew the second-largest amount at $659m.

Banks have been earning large profits through investment in government papers, as rising domestic debt has continued to push successive governments towards more borrowing.

In contrast, the telecommunications sector saw substantial disinvestment. According to the State Bank’s balance sheet, disinvestment in telecom reached $477m during July-April, compared with disinvestment of $115m in the same period last year.

The latest figures point to a broad-based decline in foreign investment inflows despite continued support from China and contributions from a handful of other countries. They also show that while some sectors, particularly power and financial business, continued to attract capital, others such as telecommunications experienced a sharp withdrawal of funds during the period under review.