Abdul Ghani

Pakistan attracted $364.3 million in net foreign direct investment (FDI) during July–August FY2026, with inflows concentrated in the power and financial services sectors, according to the Monthly Economic Update & Outlook – September 2025 published by the Finance Division.

The report highlights that China remained the largest single source of FDI. Sectoral distribution shows that the power sector attracted $156.9 million, while financial services brought in $110.2 million. These two sectors alone accounted for more than 70 percent of total inflows during the period.

Despite this positive performance, the report noted that portfolio investment experienced net outflows, with private investors withdrawing $74.8 million and public investors $11.8 million. Combined, total foreign investment remained negative at -$277.7 million, reflecting ongoing caution among international investors regarding Pakistan’s broader economic and political environment.

The Finance Division emphasized that while FDI inflows remain concentrated in traditional sectors, efforts are being made to diversify and attract investment into manufacturing, IT, and agriculture. However, the current global environment—marked by higher interest rates, geopolitical tensions, and shifting supply chains—continues to pose challenges for emerging economies like Pakistan in attracting long-term investment.

Credit: INP-WealthPk