Karachi, October 20, 2025 – Pakistan recorded a 34% year-on-year decline in foreign direct investment (FDI) during the first quarter (July–September) of fiscal year 2025–26, according to data released by the State Bank of Pakistan (SBP) on Monday.
The central bank reported that total FDI inflows fell to $569 million in 1QFY26, down from $865 million during the same period of the previous fiscal year, reflecting subdued investor confidence and global economic uncertainty.
Meanwhile, the capital market also witnessed a sharp rise in outflows. During the quarter under review, foreign investors withdrew $121.5 million, compared to $22.8 million in outflows during the corresponding quarter of last year.
As a result, the total private investment inflow stood at $447.3 million between July and September 2025, significantly lower than $841.8 million recorded in the same period last fiscal year.
The SBP data further revealed that foreign public investment also declined sharply, registering a net outflow of $511.8 million in the first quarter, compared to an outflow of $155.3 million a year earlier.
In September 2025, Pakistan attracted $185.6 million in FDI, compared with $417.4 million in September 2024. However, foreign portfolio investment saw a marginal improvement, with outflows of $46.7 million, slightly lower than $47.5 million in the same month last year.
The country’s foreign public investment, however, posted a major reversal — an outflow of $500 million in September 2025 compared to an inflow of $77 million in the corresponding month of the previous year.
Economists attribute the decline in FDI to macroeconomic challenges, policy uncertainty, and cautious investor sentiment amid global financial tightening.