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FDI drying up


Mar 21, 2007
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United States

FDI drying up

BR Research
March 22, 2023.

Nothing is going in favor of the investment climate in the country. Foreign direct investment in the country is drying up fast. For 8MFY23, net FDI was not even $1 billion. The country attracted net FDI of $784 million, down by 40 percent year-on-year from $1.3 billion in 8MFY22. While outflows have been higher in some months and lower in others, FDI inflows have been continuously falling.

FDI inflows for 8MFY23 were down by 27 percent year-on-year. Net FDI in February 2023 increased by 10 percent year-on-year, which might not be considered any achievement as the base is small, and the slight uptick does not signify any improvement in the FDI flows to the country.

Besides China, and that too because of CPEC, no country has made any significant investment in the country in a long time. And the recent economic and political turmoil has created a vacuum where the prospects of foreign investment are not moving the needle. Political instability and investment cannot co-exist, which is happening in Pakistan lately as political volatility and ensuing economic crisis are keeping investors at bay.

Uncertainty since the last year is one factor that is affecting foreign investment. It makes no sense for foreign investors to invest in a country when its risk profile and credibility in shambles. But then, the country's environment has mostly been unconducive for investment – whether local or foreign.

The high-interest climate these days and the high cost of business make the country unattractive to investors. Along with political instability and economic slowdown, a governance structure has always been a hindrance for investors as they prefer transparency and accountability – both of which are lacking in the system.

The investor-friendly climate is critical –policies such as tax breaks, incentives, sector-specific subsidies, free trade zones, and business regulations are only marginally or partially investor friendly. These issues continue to linger and have added to the current turmoil making it hard for FDI to find any major leap.

pakistan FY is July to June right ? (just confirming)

cpec would have by now become a net outflow by now but for two things - delayed projects and I think one case of repayment extension/rollover granted by China.

time is fast approaching for pakistan to sell something
time is fast approaching for pakistan to sell something


Ghazi sb,

PMLN tenure 2013-18 seems to have been the golden era of FDI.


Okay Lets See Tuwairqi Steel Suspends ProductionDue To Violation of Gas Supply Agreement,Barclays and OMV Leave The Country No New Entrant In 3G 4G License Auction,So No That Was Not A Golden Era Golden Era Was That Of Musharraf

Nokia Coming In

Al Tuwairqi Setting Up First DRI Steel Plant

Mobile Cellular 2G License attracted 33 Parties

Offers For Refineries Came From The Entire Middle East Kuwait Saudi Iran and UAE

I Can Go On and On But You Get The Idea
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During Imran Khan's golden rule what FDI was there ?



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