The investors did not have high expectations from their businesses under the struggling economy but keep running the businesses under making minimum investment just to avoid a halt to activities, said experts. Through clearing the way for profit repatriation to headquarters abroad the experts also emphasised that the Government of Pakistan should have given top priority to foreign financiers, which would have given them confidence and encouraged the investors to pour more capital.
|Net FDI in Pakistan ($ Million)|
|Oil & Gas||249||146||372||349.8||311.4||251||195.3||135.1||15.2|
Statistics showed that Multinational Companies (MNCs) in a year can dispatch only 20 per cent of profits and dividends estimated at $1.5 billion. The Foreign Direct Investment (FDI) according the State Bank of Pakistan (SBP) statistics, in July grew by 17.3 per cent on year-on-year (YoY) basis to $87.7 million July 2023 as against to $74.8 million in the corresponding month in 2022. During July 2023 the inflow of FDI grew by $12.9 million.
In Pakistan the foreign private investment furthermore, grew by 32.4 per cent or $25.5 million on YoY basis to $104.0 million in July 2023 as against to $78.5 million in the corresponding month previous year. During July 2023, inflows of FDI grew by 19.1 per cent or 23.7 million and reached at $147.7 million against $124.0 million came in Pakistan in the corresponding month of 2022. The outflows on the other hand, reached at $60.0 million in July 2023 as compared to $49.2 million in July 2022. FDI in Pakistan during the FY2023 fell to $1.455 billion, down 24.80 per cent on YoY basis as against to $1.935 billion in FY2022. Besides, persistent economic mismanagement and political unrest, mainly the sharp rupee devaluation, forced foreign financiers to stay away.
The rupee-dollar exchange rate volatility is the biggest factor discouraging foreign investors from investing heavily, though Pakistan offers promising returns and has a workforce with large young population. With the aim of running existing businesses and they initiated no new project, the FDI statistics suggested that foreign investors poured limited investment. It is said that to stimulate foreign investment in Pakistan the new government after the elections would have to create an investment-friendly environment, which could help build foreign currency reserves and prop up the rupee.