1QFY27 FDI growth masks a narrow investment base

Business Recorder reported that net foreign direct investment in Pakistan rose nearly 20 percent year on year to $719.7 million in the first quarter of FY27. The growth is welcome, yet total inflows remain modest and are concentrated among a small number of sources. Gross inflows climbed 20 percent to $968 million, while outflows grew by the same rate to $248 million.

September was weaker, with net FDI of $219.5 million, up 18.5 percent from a year earlier but roughly 31 percent below August's $315.9 million. The paper points out that a handful of large deals can shift the headline figures sharply from one month to the next. Canada was the largest source at $229 million, and China followed with $197.5 million, together accounting for almost 60 percent of the net total.

By sector, financial businesses drew about $191 million, up 39 percent, while power received $139.4 million, a 32 percent rise. The publisher argues that the inflows are not broad-based, and that Pakistan needs more capital in export-oriented manufacturing, technology and productive industries. In its view, the 20 percent gain from a low base does not yet amount to a real turnaround.