Foreign investment drops 58 percent in July-October 2011

KARACHI: The investors remained cautious to land foreign investment in the country, which witnessed a fall of 58 percent in the first four months of current financial year 2011-12.

State Bank of Pakistan data showed that the net foreign investment stood at $ 238 million in specific sectors particularly from developing countries.

The Foreign Direct Investment (FDI) landed $ 340.2 million with drop of 27.7 percent compared with the corresponding period of previous fiscal year whereas Foreign Portfolio Investment (FPI) down by 200.8 percent in July-Oct with outflow of $ 102.1 million.

The net foreign investment inflow was recorded developing economies particularly from the Middle East countries whereas developed countries investment witnessed shrinking in the country.

The FDI inflow FPI inflows recorded $ 198 million and $5.4 million from these developing economies, the UAE, Kuwait, and China. The FDI and FPI from developed countries saw a steep drop with FDI recorded at $ 36.4 million but FPI witnessed outflow of $ 107 million in Jul-Oct.

As the developed countries have been facing tough financial period, their business expansion have been stagnant for last couple of years. Not only this, the investors have pulled back their investment particularly in the stock exchanges of the country.

The inflow of foreign investment in the country has been continued to slow for past five years owing to uncertain political, law and order situation of the country. The power and gas load shedding have further worsened the business situation to attract investment in the country.

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