Net foreign investment surges in May led by China, UAE and Hong Kong
ISLAMABAD, June 17, 2026 — Pakistan recorded a sharp rebound in foreign direct investment (FDI) in May 2026, with net inflows rising nearly 293% month-on-month to $214 million, supported by stronger investment from China, the United Arab Emirates and Hong Kong.
According to the latest data, net FDI stood at $214 million in May compared with $54 million in April.
Analysts said the sharp increase was partly due to a low base effect in April, when inflows were weighed down by an outflow in the cement sector following the divestment of Attock Cement.
Strong Recovery After April Weakness
The latest figures reflect a notable recovery in investor sentiment after a subdued performance in the previous month.
However, cumulative net FDI during the first eleven months of fiscal year 2025-26 (11MFY26) remained at $1.623 billion, marking a 28% decline compared with the same period last year.
Economists said that while monthly improvements are encouraging, sustained inflows are needed to support long-term economic stability and growth.
China, UAE and Hong Kong Lead Investments
China, the United Arab Emirates (UAE), and Hong Kong were the leading sources of investment inflows during May.
China remained the dominant contributor, reflecting ongoing bilateral economic cooperation and continued investment activity across key sectors.
Power Sector Attracts Largest Share
Sector-wise, the power sector received the highest foreign investment during the month, followed by financial businesses.
The inflows highlight the strategic importance of energy infrastructure in Pakistan’s investment landscape, while financial sector participation signals growing investor interest in banking and related services.
Outlook for Investment Flows
Foreign direct investment remains a key source of external financing for Pakistan, supporting industrial growth, employment creation and foreign exchange stability.
Analysts said that macroeconomic stability, consistent policy direction and structural reforms will be critical in attracting higher investment levels going forward.
While annual FDI remains below last year’s levels, the strong rebound in May suggests improving investor sentiment as Pakistan continues efforts to strengthen economic fundamentals and attract foreign capital.
