DID Press: According to the State Bank of Pakistan, foreign direct investment (FDI) in Pakistan fell 41% year-on-year to $981 million in the first seven months of the current fiscal year, reflecting a sharp erosion of investor confidence amid rising insecurity and regional tensions.
Economists cite escalating militant attacks and broader geopolitical risks as key deterrents to new capital inflows.
China remained Pakistan’s largest investor with $495 million in FDI, down sharply from $857 million a year earlier. Other major sources included Hong Kong ($188 million), the United Arab Emirates ($126 million), and Switzerland ($124 million).
By contrast, Norway recorded the largest divestment, with $365 million in capital withdrawals.
Despite government efforts to attract overseas investors, persistent security risks and macroeconomic volatility continue to weigh heavily on Pakistan’s investment outlook.