Karachi, October 21, 2024 – The State Bank of Pakistan (SBP) announced on Monday a remarkable increase in foreign direct investment (FDI), which surged by over 48% in the first quarter (July-September) of the fiscal year 2024-25.
The SBP revealed that FDI inflows reached $771 million during this period, compared to $520 million in the corresponding quarter of the previous fiscal year.
This substantial rise in FDI signals growing international confidence in Pakistan’s economic prospects and highlights the government’s efforts to attract foreign capital. The influx of investment is seen as a critical factor in bolstering the country’s economic recovery and growth trajectory.
In addition to the significant FDI increase, the SBP noted that total foreign private investment rose to $748 million in the first quarter of FY25, a robust increase of 41% from the $530 million recorded in the same period last year. This growth underscores the positive reception of Pakistan’s investment climate by foreign investors, despite ongoing economic challenges.
Conversely, the SBP reported a decline in portfolio investment within the capital markets, with an outflow of $22.8 million during the July-September 2024-25 period. This contrasts sharply with the inflows of $9.6 million observed in the same quarter of the previous fiscal year, indicating some apprehension among foreign portfolio investors.
In the realm of foreign public investment, the report indicated that debt securities attracted an investment of $155.3 million during the first quarter of the current fiscal year. This reflects a cautious but optimistic stance from foreign investors regarding the stability of Pakistan’s financial markets.
Overall, the SBP said the total foreign investment in Pakistan surged by an impressive 70% to reach $904 million during the first quarter of FY25, up from $530 million in the same period last year. This substantial increase is a positive indicator for the country’s economic landscape, suggesting a potential turnaround in investor sentiment and a renewed interest in Pakistan as a viable investment destination.
The SBP’s findings highlight the importance of continued government efforts to create a conducive environment for foreign investment, as well as the necessity of implementing structural reforms to sustain this growth. The significant rise in FDI and total foreign investment reflects a critical opportunity for Pakistan to enhance its economic development and create jobs, which is vital for long-term prosperity.
As the government works to address economic challenges, the recent surge in foreign investment could serve as a catalyst for growth, paving the way for increased economic stability and development in the months and years to come.