KARACHI: Foreign direct investment (FDI) into Pakistan fell to $1.637 billion in FY26, down 34 per cent from a year ago, according to figures from the State Bank of Pakistan (SBP) released on Friday.
The nation’s net foreign direct investment was $14 million in June, reflecting a 94 per cent decline compared with May and the same month last year. “The sharp decline [in FDI] was primarily driven by net outflows from the food and electronics sectors, while net inflows into the power and financial services sectors provided partial support,” said Topline Securities in a note.
“Country-wise, the United States recorded a net outflow of $165 million, weighing heavily on overall FDI. Meanwhile, China and Hong Kong remained major net contributors during the month,” it added.
Pakistan continues to struggle to attract foreign investors. Although there is growing optimism about the country’s economic prospects, and investors are more willing to recommend it as a destination for fresh FDI, Pakistan still falls behind its regional competitors in securing large-scale capital inflows. This disparity highlights the widening gap between improving sentiment and actual investment competitiveness.
The SBP data showed that FDI in the power sector, which accounts for the largest share of overall FDI, fell to $958.3 million during the July-June FY26 period, down from $1.178 billion last year.
Moreover, FDI inflows into the communication sector recorded an outflow of $456 million in the 12 months of the last fiscal year, compared with outflows of $70 million during the previous year. On the other hand, FDI in the financial services sector increased to $805.5 million during July to June FY26, up from $702.6 million in FY25.
