Foreign direct investment (FDI) during the first seven months of the this fiscal year dropped 3 per cent on a year-on-year basis.
The State Bank of Pakistan (SBP) reported on Thursday that the country received a total FDI of $1,488 million during July-January period of 2017-18.
The FDI fell despite a healthy economic growth as reported by the Ministry of Finance and the central bank. The SBP expects a 5.8pc growth rate in FY18, indicating that domestic investment has increased substantially to achieve about 6pc economic growth target.
The Chinese investments totalled $1,003.3m constituting 67.4pc of the total FDI the country received during the period under review suggesting that investments from other countries had been declining.
The second largest inflow was noted from Malaysia, accounting for an investment of $118m. Inflows from UK and USA stood at $94.3m and $75.5m respectively.
Power sector captured the lion’s share of foreign investment worth $542m during the July-January period, pointing to the focus of Chinese investment in Pakistan. It also indicated that the highest amount of $415m was invested in coal power plant.
The report also shows that the construction industry still has a great potential for foreign investments as the sector attracted second largest share , amounting $385m, during this period.
Financial businesses received $178m, oil and gas exploration $120m, trade $55m and food $24m during this period.
Since the portfolio investment has improved, the total foreign private investment (FPI) between July-June increased by 23.3pc to $1454m. The outflow of portfolio investment was just 34m during this period compared to a total outflow of $353m in the corresponding period of FY17.
Debt servicing
Meanwhile, the country paid $1.523 billion in external debt servicing for the second quarter of this fiscal year, the State Bank reported on Thursday.
Of this, $599 million was paid as interest, and $924m as repayment of principal. The overwhelming majority of these payments were on public debt, coming in at $1.227bn.
Private sector debt payments stood at $211m. The remaining $72m was paid by public sector enterprises.
The figures show a drop from the preceding quarter when the government paid $2.102bn as total external debt servicing.
