Foreign investment surges 40pc in July compared to same period last year

[Naveed Yaseen]

By Shahzad Anwar
KARACHI: Net inflow of foreign investment in the country augmented by 40 per cent during July 2008 as compared to the same period last year.

According to latest figures of the State Bank of Pakistan (SBP), total foreign investment in the country stood at $220.5 million during the first month of fiscal year 2008-09 compared to $157.5 million during July 2007. The quantum of Foreign Direct Investment witnessed a substantial increase of 76.1 per cent to $340.7 million during July 2008 as compared to $193.5 million in the same period of fiscal year 2007-08.

It is pertinent to note that during fiscal year 2007-08, total foreign investment declined to $5.193 billion which was recorded at $8.428 billion in financial year 2006-07. However, during last fiscal year the net inflow of FDI slightly improved to $5.153 billion as compared to $5.139 billion a year back.

In the first month of current fiscal year 2008-09 the flight in portfolio investment continued which has been declining since third quarter of fiscal year 2007-08. In July 2008 the foreign portfolio investment declined by 970.1 per cent and finally stood at minus $119.2 million that was recorded at $13.7 million in July 2007.

In fiscal 2007-08 portfolio investment shed to $19.3 million against $1.821 billion in year 2006-07. In July FY09, total foreign investment from developed countries including Western Europe, European Union, Luxembourg, Denmark, France, Netherlands, Sweden, UK, other Western Europe, Norway, Switzerland, Northern America, Canada, USA, Australia, Japan and unspecified developed countries dropped by 101.4 per cent to minus $2.4 million.

In the meantime, July FY09 foreign investment from developing economies including Caribbean Islands, Cayman Island, Bahamas, other Caribbean countries, Libya, Egypt, Mauritius, South Africa, Oman, Iran, Kuwait, Bahrain, Qatar, Saudi Arabia, Turkey, UAE, Bangladesh, China, Hong Kong, Malaysia, Singapore, India, South Korea, and unspecified developing counties increased by 700.4 per cent to $222.9 million against $27.8 million in July FY08.

According to SBP figures during first month of current fiscal year, FDI investment from developing economies recorded $220.9 million against $58.9 million in corresponding period of fiscal year 2007-08. The highest growth in inflow of foreign investment was recorded from Asia countries at $213 million.

The breakup showed that in July 2008 out of total foreign private direct investment, $2.7 million landed in food sector, $18.7 million in pertro chemical group, $4.2 million in chemicals, $6.3 million in petroleum refining, $37.1 million in oil & gas explorations, $3 million in pharmaceutical & OTC products, $4.4 million in cement, $6.4 million transport equipment (automobiles), $8.7 in power sectors, $3.6 million in construction, $11.6 million in trade, $159.6 million in communications, of which $147.7 million was attracted by telecommunication sector alone. In financial sector $43.4 million came in, while sectors like social and personal services attracted only $0.3 million and $9.5 million respectively.

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