Pakistan has successfully fetched $2.2 billion in Foreign Direct Investment (FDI) during the first 10 months of Fiscal Year 2017-18, the investment came under the CPEC by Chinese investment firms.
China tops the FDI contributors list, Pakistan has received massive investment from China in construction, infrastructure projects, and energy sector under the CPEC. Being the top contributor China accounted for 68 percent of total FDI in Pakistan during the current fiscal year.
According to data revealed by State Bank of Pakistan (SBP), FDI rose by 2.4 percent during the first 10 months, Chinese rising investments heavily backed the rising trend in FDI under the CPEC projects.
The country was able to fetch roughly $2.238 billion FDI during the period July-April of the FY-17-18 as compared to $2.185 in the corresponding period of FY-16-17, this indicates the increase of $53.1 million, during the period FDI inflows were $2.803 billion against the outflows $566 million.
As compared to last year, China has increased their FDI activities, China pushed the FDI by 57 percent, total FDI from China rose to $1.514 billion during the first 10 months of the current fiscal year which was up from the $962 million during the corresponding period of last fiscal year.
It seems China has increased the pace of investments in Pakistan under CPEC and the next financial year of 2018-19 is also likely to fetch more investments as other foreign countries are also planning to invest in Pakistan.
However, significant inflows of FDI came into the country from the United Kingdom, the English country has invested $248 million during the first 10 months of the current fiscal year. Malaysia comes at the third position with $129 million of FDI.
According to the financial experts, the current inflows of FDI are not sufficient to finance the current account deficit of Pakistan. The federal government is bound to borrow from the international market due to this, Pakistan has recently raised some one billion dollars from the Chinese bank in April in order to save depleting foreign reserves.
The SBP further said that the total FDI, foreign public investment and portfolio investment has surged by 65 percent during the current fiscal year. Pakistan’s total FDI stood at $4.577 billion during the period under review as compared to $2.779 billion during the last year FY-2016-17.
There was an increase of $1.798 billion in FDI, however, month-on-month basis reflects a downturn in April, FDI fell by 32 percent to $172 million in the month of April 2018 as compared to $235 million in April 2017.
However, year-on-year basis Pakistan has seen a significant improvement in FDIs which is projected to surge further in the coming years.