Net FDI declines sharply due to outflows from food and electronics sectors, while power and financial services provide support
ISLAMABAD: Pakistan’s Foreign Direct Investment (FDI) declined sharply by 94% month-on-month in June 2026, falling to $14 million compared with $214 million recorded in May, according to data released on foreign investment flows.
The steep decline was mainly driven by net outflows from the food and electronic sectors, which significantly reduced overall investment inflows during the month.
However, increased investment activity in the power and financial services sectors provided partial support and helped cushion the impact of the decline.
United States records major outflow
Country-wise data showed that the United States recorded a net outflow of $165 million during June 2026, making it one of the largest contributors to the decline in Pakistan’s monthly FDI.
Meanwhile, China and Hong Kong remained among the key sources of foreign investment inflows during the period.
Analysts noted that monthly FDI figures can fluctuate significantly due to the timing of major transactions, sector-specific investments, and profit repatriation by foreign companies.
FY26 FDI remains positive
Despite the sharp monthly decline, Pakistan recorded total net Foreign Direct Investment of $1.64 billion during fiscal year 2025-26 (FY26).
The government has continued efforts to attract foreign investment through economic reforms, policy measures and initiatives aimed at improving the overall business environment.
Officials have highlighted investment facilitation, industrial expansion and greater participation from international companies as key priorities for strengthening Pakistan’s external sector.
Outlook
Analysts said Pakistan’s ability to sustain FDI inflows will depend on maintaining macroeconomic stability, improving investor confidence and ensuring a predictable policy environment.
While the June decline highlights short-term volatility in foreign investment flows, continued inflows into strategic sectors such as energy, financial services and infrastructure remain important for supporting long-term economic growth.