By Moaaz Manzoor

Pakistan’s net foreign direct investment fell by $852.91 million, or 34.3%, during FY2025-26 as foreign investment inflows weakened and outflows climbed to their highest level in the six-year period reported by the State Bank of Pakistan.

According to the latest SBP data, net direct investment stood at $1.637 billion during the fiscal year ended June 30, 2026, compared with $2.490 billion in FY2024-25.

The figures are reported by the central bank in millions of US dollars and represent the difference between foreign direct investment inflows and outflows during each fiscal year.

Gross FDI inflows declined by $712.40 million, or 16.6%, to $3.568 billion in FY2025-26 from $4.280 billion in the preceding fiscal year.

Despite the decline, the latest inflow figure remained the second-highest recorded during the six years shown in the SBP dataset, after the $4.280 billion received in FY2024-25.

Investment outflows, however, moved in the opposite direction. They increased by $140.51 million, or 7.8%, to $1.931 billion from $1.791 billion a year earlier.

The FY2025-26 outflow was the highest in the period from FY2020-21 to FY2025-26. As a result, outflows were equivalent to approximately 54.1% of total FDI inflows during the latest fiscal year, compared with about 41.8% in FY2024-25.

The combination of lower inflows and higher outflows reduced net FDI to its second-lowest level. The six-year trend shows that net direct investment stood at $1.821 billion in FY2020-21 before increasing to $1.936 billion in FY2021-22. It subsequently fell to $1.627 billion in FY2022-23.

Net FDI then recovered to $2.347 billion in FY2023-24 and reached a six-year high of $2.490 billion in FY2024-25 before retreating to $1.637 billion in the latest fiscal year.

The movement in gross inflows followed a similar but more volatile pattern. FDI inflows stood at $3.061 billion in FY2020-21, declined to $2.692 billion in FY2021-22 and fell further to $2.568 billion in FY2022-23.

Inflows recovered to $3.166 billion in FY2023-24 and rose sharply to $4.280 billion in FY2024-25 before declining to $3.568 billion in FY2025-26.

Outflows, meanwhile, remained below $1 billion during FY2021-22, FY2022-23 and FY2023-24, before rising sharply to $1.791 billion in FY2024-25 and reaching $1.931 billion in FY2025-26.

The latest SBP figures show that the decline in net foreign direct investment was not caused by weaker inflows alone. The increase in investment outflows also significantly narrowed Pakistan’s net FDI position during FY2025-26.

Credit: INP-WealthPk