Karachi, November 17, 2025 – Pakistan has recorded a significant 26% decline in foreign direct investment (FDI) during the first four months of fiscal year 2025-26, according to fresh data released by the State Bank of Pakistan (SBP) on Monday.
The drop highlights persistent challenges in attracting foreign capital despite recent efforts to stabilize the economy.
FDI inflows fell to $748 million between July and October FY26, down from $1.02 billion in the same period of the previous fiscal year. Analysts attribute this decline to global economic uncertainty, cautious investor sentiment, and Pakistan’s ongoing structural reforms.
Meanwhile, investment outflow from the capital market increased notably. Outflows reached $160 million during the review period, compared with inflow of $97 million recorded last year, reflecting investor profit-taking and market volatility.
As a result, the net inflow of private investment shrank to $588 million, compared with $913 million in the corresponding months of FY25. The decline in private investment underscores reduced confidence among foreign investors and slower decision-making on new projects.
Foreign public investment also experienced a sharp reversal. The sector posted an outflow of $379 million, compared with an inflow of $283 million during the same months of the previous fiscal year, further weighing on Pakistan’s overall investment landscape.
Overall, total foreign investment into Pakistan slipped to $209 million during July–October FY26, a steep fall from $1.2 billion recorded in the same period last fiscal year, signaling the need for continued policy reforms and improved investor confidence.