Foreign investment falls 34.1pc during July/August

[Lahore_Real_Estate]

KARACHI Net foreign investment in Pakistan fell 34.1 percent to $267 million in the first two months of the fiscal year 2010/11, compared with $405.4 million in the same period last year, the central bank said on Friday.

Out of the total foreign investment, foreign direct investment fell 50.2 percent in July and August to $171.4 million, from $344.5 million in the same period last year, the State Bank of Pakistan said.

A worsening security situation, with a Taliban insurgency in the country's northwest, coupled with chronic power shortages, has put off investors, analysts say.

There was a net inflow of $95.6 million in the first two months of the 2010/11 fiscal year, compared with a net inflow of $60.9 million in the same period last year.

An International Monetary Fund (IMF) emergency loan package agreed in November 2008 helped Pakistan avert a balance of payments crisis and shore up reserves.

It received the fifth tranche of $1.13 billion of the IMF loan of $11 billion in May and Pakistan and IMF authorities are going to meet in November to discuss the release of the sixth tranche.

The IMF on Wednesday approved as expected $451 million in emergency funding for Pakistan to help the country rebuild from devastating floods. This was separate from the $11 billion IMF programme.