Foreign direct investment (FDI) in Pakistan dropped 34 percent in the first quarter of the fiscal year FY2026, it was reported on Wednesday.
According to statistics released by the State Bank of Pakistan (SBP), Pakistan fetched FDI amounting to USD 568.8 million during July-September of the current fiscal year, compared with USD 864.6 million in the same period last year, depicting an increase of $296 million.
During the quarter, total FDI inflows amounted to $886 million, down from $1.315 billion in the same quarter of last year, reflecting continued investor caution amid global and domestic economic challenges.
The decline indicates that investor confidence remains subdued despite recent signs of macroeconomic stabilization.
Portfolio investment also showed weakness, posting net outflows of $121.5 million in the first quarter. Analysts attribute this to profit-taking by foreign investors and limited activity in Pakistan’s equity and debt markets.
As a result, the country’s net foreign investment turned negative, standing at $64.5 million during July-September FY26, compared with a net investment of $997 million in the same period last fiscal year.
Month-on-month basis, FDI in Pakistan was $185.6 million in September 2025 compared to $417.4 million in September 2024.
Economic observers note that while Pakistan’s external position has improved due to a narrower current account deficit and stronger remittance inflows, sluggish FDI and portfolio investment underscore the need for policy consistency, improved business climate, and political stability to attract long-term capital.
