Karachi, May 16, 2025 – The State Bank of Pakistan (SBP) on Friday released data showing a slight decline in foreign direct investment (FDI) during the first ten months (July–April) of the fiscal year 2024-25. According to the SBP report, FDI dropped by 2.8% to $1.78 billion, compared with $1.84 billion recorded in the same period of the previous fiscal year.
The SBP highlighted that despite the slight downturn in direct investment, overall foreign investment trends in the country presented a mixed picture. One of the major concerns raised in the report was the sharp drop in portfolio investment, which registered a massive decline of 457%, resulting in an outflow of $290 million. This is in stark contrast to the inflow of $81.2 million observed in the corresponding period last year.
As a result, total net inflows under foreign private investment – which combines both direct and portfolio investment – witnessed a decline of 22.1%, falling from $1.92 billion to $1.49 billion during the review period. The SBP attributed this decline primarily to the outflows from the equity market by foreign investors, who have remained cautious amid economic uncertainties and global market volatility.
However, in a more positive development, the foreign public investment outflow eased significantly during the period. The SBP noted that outflows from public-sector investment dropped to $285.5 million, compared to $880 million in the same period last year, indicating improved confidence in Pakistan’s sovereign instruments.
Owing to the slowdown in outflows under public investment, the total foreign investment in Pakistan showed a 16.5% increase, reaching $1.21 billion during July–April of FY25, up from $1.04 billion recorded in the same period of FY24.
The SBP emphasized the importance of structural reforms and investor-friendly policies to attract and retain foreign investment. It noted that improving macroeconomic stability and providing a more transparent and predictable regulatory environment would be essential for reviving FDI and enhancing long-term investment flows into Pakistan’s economy.