According to State Bank of Pakistan (SBP), Foreign Direct Investment (FDI) reached up to $288 million during the month of October, marking a raise of 150% as compared to the same period last year when FDI was at $115 million.
The main FDI received during the month was from neighboring country China with total investments of $202 million in the CPEC projects. Investment from China during the last four months came up to $632 million from July-October FY 18, which was up by 224% as compared to the same period last year. Overall FDI during the last four months stood at $940 million, up from $539 million during the same period last year.
Power sector received the major portion of investments i.e. $154 million during October 2017 followed by the construction and trade sector that received $53 million and $43 million, respectively. CPEC has been the driving force in the increase in investments in the power sector. Both China and Pakistan are currently focusing on bringing an end to power outages by installing mega power projects in the road belt.
The power sector has also received highest FDI in the first four months of the Fiscal Year i.e. $422 million, followed by financial business sector ($76 million), Communications ($69 million), and Gas Exploration ($58 million). Apart from China, other countries that made significant investments during the month of October include Netherlands ($27million), France ($9.5 million), and Singapore ($9 million).
It is expected that the FDI will continue to increase in the coming month as CPEC projects will continue to attract more investment, specifically in the power and development sectors. The more FDI Pakistan attracts, the more helpful it will be for Islamabad in reducing the sky-high current account deficit.