July-April foreign investment falls 8.6 percent

[Lahore_Real_Estate]

KARACHI: Net foreign investment in Pakistan fell 8.6 percent to $1.534 billion in the first 10 months of the 2010/11 fiscal year because of a decrease in foreign direct investment, the central bank said on Monday.

Foreign investment totalled $1.678 billion in the same period last year.

Foreign direct investment fell 28.6 percent in the July-April period to $1.232 billion from $1.724 billion in the same period last year, the State Bank of Pakistan said.

Pakistan's unstable security, a Taliban insurgency in the country's northwest and chronic power shortages have put off long-term investors, analysts say.

However, with emerging markets increasingly on the radar of fund managers, Pakistan has seen a flow of foreign investment in the country's main stock exchange.

Foreign portfolio investment rose 749.5 percent to $302 million in the first ten months of 2010/11, compared with an outflow of $46.5 million in the same period last year.

Pakistan has struggled with a troubled economy and an International Monetary Fund (IMF) emergency loan package agreed in November 2008 helped it avert a balance of payments crisis and shore up reserves.

It received the fifth tranche of $1.13 billion of the $11 billion loan in May 2010. Pakistan and IMF authorities are in Dubai to discuss the release of the next tranche and budget targets for the 2011/12 fiscal year.