Stronger foreign investment in financial services, power and trade offsets sharp declines in mining, communications and oil and gas exploration.
KARACHI: Pakistan’s net foreign direct investment (FDI) increased by nearly 20 per cent year-on-year to $719.7 million during the first quarter of fiscal year 2026-27, supported by stronger inflows into financial businesses, power generation, trade and electronics, according to provisional data released by the State Bank of Pakistan (SBP).
Net FDI rose by $119.3 million from $600.4 million in July–September FY2025-26 to $719.7 million in the corresponding quarter of FY2026-27.
The improvement came as gross FDI inflows increased to $967.7 million from $806.5 million a year earlier. However, investment outflows also climbed to $248 million from $206.2 million, partially offsetting the increase in inflows.
In September 2026, Pakistan recorded net FDI of $219.5 million, comprising gross inflows of $292.7 million and outflows of $73.2 million.
Financial sector leads foreign investment
Financial businesses attracted the largest net FDI during the first quarter, with investment rising to $191.3 million from $137.6 million in the same period last year.
The power sector ranked second, attracting net FDI of $139.4 million, compared with $105.6 million a year earlier. Hydel power projects received $74.8 million, while coal-based power attracted $61.2 million in net investment.
Trade-related investment recorded one of the strongest increases. Net FDI in the trade sector surged to $115.7 million from just $2.4 million in the corresponding quarter of the previous fiscal year.
The figures indicate that financial services, power generation and trade accounted for important gains in Pakistan’s overall net foreign investment during the opening quarter of FY2026-27.
Mining and oil and gas exploration face setbacks
Despite the overall increase in FDI, several sectors recorded substantial declines.
Net investment in mining and quarrying fell to $102.7 million from $198.5 million in the first quarter of FY2025-26.
The communications sector also experienced a sharp reduction, with net FDI dropping to $8.3 million from $43.4 million.
Oil and gas exploration recorded net outflows of $8 million, reversing net inflows of $35.9 million in the corresponding period last year.
The contrasting figures highlight the uneven distribution of foreign investment across Pakistan’s economy, with stronger inflows into selected industries failing to translate into gains across all major sectors.
Electronics and automobiles attract more investment
The electronics sector recorded net FDI of $21.7 million during July–September FY2026-27, compared with net outflows of $9.3 million a year earlier.
Investment in transport equipment, including automobiles, increased to $35 million from $11.9 million. Electrical machinery also attracted higher investment, with net FDI rising to $20.1 million from $11.8 million in the same period last year.
The textile sector recorded net investment of $5.6 million, up from $1.3 million a year earlier.
However, the chemicals sector experienced net outflows of $1.2 million, compared with net inflows of $10.5 million in the corresponding quarter of the previous fiscal year.
Foreign investment gains remain uneven
The nearly 20 per cent increase in net FDI marks an improvement in Pakistan’s aggregate foreign investment position during the first quarter of FY2026-27. Nevertheless, the sectoral breakdown reveals that investment remains concentrated in selected industries.
Stronger inflows into financial services, power and trade supported the overall increase, while declining investment in mining, communications and oil and gas exploration weakened performance in other areas.
Sustaining foreign investment will depend on maintaining investor confidence and attracting capital across a broader range of productive sectors. The latest provisional figures provide an early indication of investment trends, but the performance of individual industries will remain important in assessing the durability of the recovery.