Karachi, July 18, 2025 – The State Bank of Pakistan (SBP) on Friday announced that foreign direct investment (FDI) into Pakistan rose to $2.46 billion in the fiscal year 2024–25, reflecting a 5% increase over the previous year’s FDI figure of $2.35 billion.
This growth highlights renewed international confidence in Pakistan’s economic potential and long-term investment opportunities.
The SBP stated that this increase in direct investment was mainly driven by sustained inflows into sectors such as energy, telecommunications, and infrastructure. These sectors have seen increased attention from foreign companies seeking to capitalize on Pakistan’s strategic location and expanding consumer market.
However, the overall picture of foreign investment was mixed. The net foreign private investment, which includes both direct and portfolio investments, declined by 15% to $2.10 billion during FY25, compared to $2.47 billion in the previous fiscal year. This drop was primarily due to significant outflows from the capital markets.
Under portfolio investment, Pakistan witnessed a notable capital flight of $355 million in FY25, in sharp contrast to an inflow of $120 million recorded in FY24. Analysts attribute this reversal to global economic uncertainty, geopolitical tensions, and profit-taking by foreign investors amid local market volatility.
Meanwhile, foreign public investment outflows were trimmed to $295 million in FY25, compared to a much larger outflow of $583 million in the preceding fiscal year. This moderation indicates improved investor sentiment regarding sovereign risk and fiscal management.
Despite the rise in FDI, the total foreign investment—including private and public inflows—declined by 8% to $1.81 billion, down from $1.96 billion in FY24. The SBP noted that while the growth in direct investment is encouraging, the country must work to regain momentum in portfolio inflows and broader capital market participation.
Experts suggest that Pakistan needs to focus on strengthening macroeconomic stability, simplifying regulatory frameworks, and improving investor protection mechanisms to sustain and accelerate investment inflows in the coming years.