Karachi, January 17, 2025 – The State Bank of Pakistan (SBP) announced on Friday a significant 20% increase in foreign direct investment (FDI) for the first half (July–December) of the fiscal year 2024-25, highlighting a positive shift in the country’s investment landscape.
According to SBP data, FDI totaled $1.33 billion in the first half of the current fiscal year, up from $1.11 billion in the same period of the previous fiscal year.
This surge in FDI reflects growing investor confidence in Pakistan’s economy, despite global economic challenges. The SBP emphasized that the rise in foreign investment signals positive trends in key sectors, including manufacturing, energy, and infrastructure. It further suggests that foreign investors are increasingly optimistic about the country’s long-term growth prospects.
However, the SBP also noted a significant downturn in portfolio investment, a key component of market-based investment. Portfolio investments in Pakistan’s stock market experienced a sharp reversal, with a net outflow of $222 million during July–December 2024. This marks a stark contrast to the inflow of $70.8 million recorded in the same period of the previous year, resulting in a 413% decrease. The SBP attributed this decline to global market volatility and domestic economic factors that have dampened investor sentiment in the short term.
In terms of overall foreign investment, the SBP reported a 6.1% decrease, with net foreign investment totaling $1.11 billion in the first half of FY25, compared to $1.18 billion during the corresponding period of the previous fiscal year. This slight reduction reflects the challenges in attracting capital inflows, with a combination of external and internal factors weighing on Pakistan’s investment environment.
However, the SBP highlighted the positive development in debt securities, where Pakistan saw an influx of $140.1 million in the first half of FY25. This was a marked improvement over the mere $0.2 million received during the same period in the previous fiscal year, signaling growing confidence in Pakistan’s sovereign debt instruments.
The SBP concluded that despite the challenges faced by the portfolio investment sector, the overall rise in foreign direct investment and debt securities suggests that Pakistan’s investment climate is showing resilience and adaptability.