Foreign Direct Investment Grows by 12% in November 2023

Foreign Direct Investment Grows by 12% in November 2023

Karachi, December 18, 2023 – Foreign Direct Investment (FDI) into Pakistan recorded a substantial growth of 12 percent, reaching $131.4 million in November 2023 on a Year-on-Year (YoY) basis.

This surge comes as a testament to the attractiveness of Pakistan’s investment climate despite global economic uncertainties.

Data released by the State Bank of Pakistan on Monday revealed that FDI in November 2022 was $117 million, indicating a noticeable increase in foreign investor confidence in the country. Delving into the components of FDI, inflows experienced a mild decline to $193.5 million in November 2023, compared to $215.5 million in the same month of the previous year. Conversely, outflows witnessed a significant reduction to $62.2 million in the month under review, down from $98.5 million in November of the preceding year.

China emerged as the leading investor in Pakistan for November 2023, injecting $76 million, followed by the United Kingdom with $25 million and Hong Kong with $23 million.

Examining the sectors that attracted the highest FDI in November 2023, the Power sector took the lead with $92 million, followed by Financial Business with $22 million and Oil & Gas Explorations with $12 million. This diversification across sectors signifies a broad-based foreign investor interest, contributing to the overall economic development of Pakistan.

The cumulative FDI during the first five months (July – November) of the fiscal year 2023-24 demonstrated a commendable growth of 8.1 percent, reaching $656 million compared to $607 million in the corresponding months of the previous fiscal year. In this period, inflows increased by 2 percent to $943 million, up from $927 million in the same period of the preceding fiscal year. Simultaneously, outflows reduced by 10.4 percent to $287 million during July – November of fiscal year 2023-24, compared to $320 million in the corresponding period of the last fiscal year.

However, the Overseas Investors Chamber of Commerce and Industry (OICCI) sounded a note of caution. In a statement, the OICCI highlighted that, excluding the COVID-19 affected year, Pakistan’s net FDI in November 2023 ranks as the third lowest in the last decade. Furthermore, the net FDI for the first five months of the current financial year is the third lowest over the past 10 years, even when considering the challenging COVID-19 period.

The OICCI emphasized that the current FDI level in Pakistan falls notably below its potential. To attract higher FDI and address recurring Balance of Payments crises, the OICCI stressed the need for consistent and transparent policies, long-term strategic planning, effective country branding, and a robust environment for Intellectual Property Rights (IPR) protection. These measures, they suggest, are vital for enhancing Pakistan’s appeal as a destination for foreign investment and fostering sustained economic growth.