Upward growth

It is quite good to note that Foreign Direct Investment (FDI) has increased by as much as 57.2 per cent year-on-year to 1.14 billion dollars in the first five months of current financial year i.e. July to November 2017 against 729 million dollars during corresponding period of last financial year.

This rising trend in FDI is obviously quite appreciable and good sign in view of dwindling foreign exchange reserves of the country, the federal government had last month raised 2.5 billion dollars by auctioning bonds in the international market to stem the downward trend in the foreign exchange reserves as a result of increased imports.

According to the reports in the media, FDI inflow in Pakistan during the period under report was dominated by China as its share was as high as 73 per cent in total inflows. Sector-wise break-up of FDI as released by the central bank shows the power sector has received the highest amount of 539 million dollars during the five months period against an inflow of just 214 million dollars a year back followed by the construction sector 271 million dollars, the oil and gas exploration sector just 71 million dollars and other sectors.

It is a good sign that China is increasing its investment in Pakistan which stood at 840 million dollars this fiscal as compared to last fiscal’s corresponding figures of 224 million dollars but on the other hand it is rather worrisome that FDI inflow from other countries is decreasing during the period under report. Most of the Chinese investment has come under the overall umbrella of China-Pakistan Economic Corridor (CPEC) which indicates Pakistan reliance on China investment is gradually growing. FDI inflow of 471 million dollars from USA and 112 million dollars from Malaysia during the same period have placed them as second and third largest FDI investment countries respectively. This growing trend in FDI if persists then it will be making good contribution to the country’s economic growth of Pakistan by end June 2018.


Lahore, December 16.


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