ISLAMABAD - The total investments in Pakistan have steadily improved in the last two years, jumping from $35.4 billion in 2013-14 to $38.3 billion in 2014-15, according to the statement of Board of Investment.

The total investments constitute 15.1% of Pakistan’s GDP. The major reason for an increase in total investments in Pakistan last fiscal year was because of the major increase and contribution of domestic investments. The total investments include the domestic investment, portfolio investment and the foreign direct investment.

The foreign direct investment (FDI) has a small contribution of 5% in the total investments every year. The total FDI in the year 2014-15 remained at $2279m as compared to the previous year’s figures of $2847.4 million. However, the net FDI dropped to $709m in the last fiscal mainly because of an unprecedented outflow of foreign capital amounting to $1570m as compared to $1149m last year 2013-14.

This is the highest outflow in the last 10 years mainly because some major foreign companies in the telecommunications and financial services sectors this year had to make repayment of their foreign loans and some cement companies in Pakistan decided to set up cement units in Iraq and Africa. Exercising this option is in line with Pakistan’s liberal investment policy which provides for repatriation of capital and dividends and profits back to native country anytime by a foreign investor without any hindrance.

It is expected that anticipated large amount of investments in pipeline from China for the China Pakistan Economic Corridor project would improve the flow of FDIs in the current year. Last year also in 2014-15, large increase in domestic investment has adequately compensated the shortfall in FDIs.