SBP data shows a sharp 51% year-on-year decline in Pakistan’s net Foreign Direct Investment (FDI) for July-January FY26.
Net FDI dropped to $694 million from $1.429 billion in the same period of FY25, a reduction of $735 million. Inflows reached $2.1 billion, offset by $1.1 billion in outflows.
January alone saw FDI fall 51% to $111 million from $226 million last year.
Sharp Decline Signals Investor Caution
Global economic uncertainty continues to weigh heavily on foreign investors eyeing Pakistan.
Domestic macroeconomic adjustments, including policy shifts, have further dampened sentiment.
Analysts stress that without consistent reforms, attracting capital remains challenging.
Portfolio investment recorded a net outflow of $287 million during the period, highlighting volatility in equity and debt markets.
Total foreign investment—including FDI, portfolio, and other categories—plunged 65% to $517 million from $1.484 billion a year earlier.
This trend follows earlier drops, such as 43% in July-December FY26.
The persistent decline raises concerns about economic growth and job creation.
Experts urge long-term, investor-friendly policies to reverse the slide.
On a brighter note, Roshan Digital Account inflows rose slightly to $216 million in January from $213 million prior, with cumulative receipts hitting $11.923 billion since 2020.
This shows sustained interest from overseas Pakistanis.
Urgent Need for Policy Overhaul
Pakistan must prioritize stable regulations and incentives to rebuild confidence.
The current figures underscore the need for swift action to boost inflows and support recovery efforts amid ongoing challenges.