Foreign direct investment takes a hit in first two months of 2020-21
Amid the deteriorating economic state of affairs, there is another bad news for Pakistan: Foreign direct investment (FDI) reduced by 37 percent in August 2020 when compared with the corresponding month of 2019, reported 24NewsHD TV channel on Friday.
The State Bank of Pakistan (SBP) in a report says the FDI volume for August stood at $102.9 million against the level of $164.3 million recorded last year.
But the alarming thing is that the trend is not limited to just one month. Hence, the FDI has experienced a 23 percent cut in July and August – the first two months of the current financial year 2020-21, shows the SBP report.
Hence, the actual FDI for the two-month period this year stood at $210.2 million.
Further bifurcation of this amount reveal that the actual new investment in private sector by foreign investors was $150.04 million, representing a decrease of $47.9 million against the corresponding period last year.
On the other hand, the foreigners invested $59.8 million in government bonds and T-Bills (treasury bills) which is again a 16 percent reduction.
The SBP report also shows sector-wise FDI details, revealing that the financial institutions remained the main beneficiary as their share was recorded at $85.4 million. It was followed by communication $37.1 million and oil and gas $34.3 million.
Meanwhile, there is an interesting fact about the FDI in the current financial year. The US and British investors have so far not invested a single penny at a time when they transferred a huge amount – Americans $38.5 million and Brits $32.8 million – from the money financed previously out of the country.