Power and financial sectors lead inflows as China and Canada emerge as major contributors
KARACHI: Pakistan’s net foreign direct investment (FDI) stood at $179 million in July 2026, registering a sharp 264% month-on-month (MoM) increase, although inflows remained 20% lower than the same month a year earlier, according to data compiled by Topline Securities from State Bank of Pakistan (SBP) figures.
The latest data showed that net FDI increased substantially from just $49 million recorded in June 2026. However, compared with July 2025, when net FDI stood at $223 million, the latest inflow reflected a decline of 20%.
Total foreign investment, including portfolio investment and other foreign public investment, reached $204 million during July 2026, up 14% year-on-year from $179 million a year earlier.
The sharp monthly improvement in FDI came after significant outflows recorded in June from the food and electronic sectors. The reversal in the latest month helped lift overall foreign direct investment despite the annual decline.
According to data, the power and financial business sectors recorded the highest FDI inflows during July, highlighting continued investor interest in key areas of Pakistan’s economy.
On a country-wise basis, China and Canada remained the major net contributors to Pakistan’s FDI during the month, reinforcing the importance of foreign investment from these markets in supporting the country’s external financing position.
The data also showed that portfolio investment remained relatively limited. Foreign private investment stood at $197 million in July, comprising $179 million in direct investment and $18 million in portfolio investment.
Foreign public investment, meanwhile, amounted to $7 million during the month, compared with an outflow of $11 million recorded in July 2025.
The strong monthly increase in FDI comes as Pakistan continues efforts to attract foreign capital, improve the investment environment and strengthen economic activity. Foreign investment remains important for supporting productive capacity, generating employment and financing expansion across key sectors.
However, the year-on-year decline highlights the challenges Pakistan continues to face in attracting sustained foreign investment. Investors remain focused on macroeconomic stability, policy continuity, exchange rate conditions, energy availability and the overall ease of doing business.
The government has been pursuing reforms aimed at improving the business environment and encouraging investment in sectors with export and growth potential. Sustained improvements in these areas could help Pakistan attract higher and more consistent foreign investment in the months ahead.
The latest FDI figures will also be closely monitored as policymakers assess the country’s external financing position and progress towards strengthening foreign investment inflows during fiscal year 2026-27.