FDI in Pakistan jumped by 88 percent in fiscal year 2020 to $2.56 billion with major investments coming in the telecommunication and power sectors from China and Norway.
On Friday, the State Bank of Pakistan released statistics that showed that Foreign Direct Investment in Pakistan shot by 88 percent in the fiscal year of 2019-20. The country had $2.56 billion FDI in July to June FY2020, compared to $1.36 billion in the former fiscal year.
China has been the biggest net contributor to FDI coming into Pakistan with $844 million, followed by Norway with $402 million and Hong Kong with $190 million.
However, the direct investment was lower than the target of government of $4.34 billion set for FY2020. This happened due to coronavirus pandemic, as it negatively impacted the investments.
FDI from China in Pakistan is in power sector while Norway’s in telecommunication
China continued to be the largest investor according to the SBP showed data with a net FDI of 844.1 million dollars in 2020 fiscal year which was followed by Norway and Hong Kong, Norway with 402 million and Hong Kong with 190.7 million dollars.
FDI in the power sector attracted $764.3 million foreign capital in July-June FY2020. However, investors pulled out $323.9 million from this sector in FY2019. The increase in the FDI in Pakistan in energy companies is attributed to ongoing work on the CEPC-related projects, especially in the thermal and coal-fired projects. Eight energy projects have been completed and nine are currently under construction.
Meanwhile, the communication sector influxes in the 2020 fiscal year raised at 663.9 million dollars whereas communication businesses faced the depletion of 55.7 million dollars at the start of the year. Foreign funds managers dragged 241.3 million dollars from the securities of government like treasury bills and fiscal year 2020 Pakistan investment Bonds, associated with 1 billion dollar depletion in the 2019 fiscal year.
Outflows from the stock market raised at 281.7 million dollars as compared with 415.2 million dollars last year. In the 2020 fiscal year, FDI amounted to 2.038 billion dollars against the fiscal year 2019 with the depletion of 54.8 million dollars.
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