By Farooq Awan

The Chinese mainland remained the largest source of foreign direct investment (FDI) into Pakistan during the current fiscal year, even as overall foreign investment recorded a decline.

According to the “Monthly Economic Update & Outlook April 2026” released by the Finance Division and available with Wealth Pakistan, net FDI inflows stood at $1.4 billion during July-March FY2026.

The data shows that the Chinese mainland was the leading contributor, with inflows amounting to $678.6 million, followed by China's Hong Kong Special Administrative Region with $253.7 million. These inflows highlight the concentration of foreign investment from a limited number of sources.

Sector-wise distribution of FDI indicates that the power sector attracted the largest share, receiving $714.2 million during the period. The financial business sector also recorded significant inflows, amounting to $588.7 million.

Despite these inflows, overall foreign investment declined compared to the previous year. Total foreign investment stood at $410.7 million during July-March FY2026, showing a decrease compared to the same period last year.

The report also highlights trends in portfolio investment, which recorded net outflows during the period. Private portfolio investment registered outflows of $550.3 million, while public sector portfolio investment showed outflows of $393.5 million.

The decline in portfolio investment contributed to the overall reduction in foreign investment, offsetting gains made through direct investment inflows.

A comparison with the previous year shows that net FDI inflows were higher during FY2025, indicating a decline in investment momentum during the current fiscal year.

The data also reflects sectoral concentration in investment flows, with power and financial services accounting for a large share of total FDI.

The report indicates that while foreign direct investment continued to flow into key sectors, overall foreign investment trends remained mixed due to outflows in portfolio investment.

The data highlights the continued importance of China as a major investment partner for Pakistan, contributing a significant portion of total FDI inflows.

The overall investment pattern reflects both inflows in key sectors and outflows in financial investments, as captured in the official statistics for FY2026.

Credit: INP-WealthPk