Foreign Direct Investment Drops 45% in February 2025

Foreign direct investment (FDI) in Pakistan fell sharply by 45% year-on-year to $95 million in February, according to a report released by the State Bank on Monday. Despite this decline, the overall FDI for the period from July to February in fiscal year 2025 saw a notable increase of 41%, rising to $1.618 billion compared to $1.147 billion during the same timeframe last year. The government is actively seeking to attract foreign investments; however, rising terrorism and security issues are tarnishing the country’s image and deterring potential investors. Economic experts warn that, given the current climate of uncertainty, there is little hope for significant increases in FDI. Pakistan’s FDI levels remain considerably lower than those of its regional counterparts, and the ongoing economic and political instability has hindered efforts to privatize loss-making state-owned enterprises. China continues to be the largest investor in Pakistan. Of the total inflows of $1.6 billion during the first eight months of fiscal year 2025, Chinese investments accounted for $662 million. Hong Kong followed with $160 million, while the United Kingdom and the United States contributed $167 million and $68 million, respectively.