Govt claims prove futile as FDI slumps by 45%

AFP

KARACHI: Much trumpeted economic progress by the finance managers and public representatives could not help to attract investment as net Foreign Direct Investment (FDI) in Pakistan during March 2014 drastically fell by 45.63 percent to $63.5 million against FDI of $116.8 million in same period last fiscal.
According to State Bank of Pakistan (SBP) on Tuesday, net inflow of foreign investment included Foreign Public Investment (FPI), portfolio investment and FDI in Pakistan during July to March 2014 of Fiscal Year (FY14) fell by 5.2 percent to $782.6 million as compared to $825.9 million in same period of FY13.
The experts said the jugglery of economic figures was simply eyewash as there was concrete proof of taking fundamental economic measures by the government. However, the net FDI in Pakistan during first nine months of current fiscal surged meagerly by 6 percent to $669.8 million as compared to $631.0 million in the same period of FY13, according to SBP.
When overwhelmed Euro Bond subscription indicates a rising foreign investors’ confidence on Pakistan and as the same time a significant drop in FDI during March 2014 dispels the overrated economic situation being depicted by the government, said the expert.
FPI during first nine months of current fiscal declined by 13.2 percent to $720.2 million as compared to $829.7 million in same period of last fiscal while in March 2014 alone FPI enormously dropped by 58.85 percent to $59.9 million as against $145.6 million in the corresponding month of year 2013.
Inflow of FDI during first nine months of FY14 remained on downward trajectory representing 11.2 percent yearly fall to $1424.5 million as compared to $1604.1 million in same period of preceding fiscal. FDI outflow in said period from Pakistan stood at $754.7 million as against $973.1 million in same period of last fiscal.
Meanwhile, according to the country wise breakup, the major countries from where net FDI were remained in negative zone during March 2014 were China by 13.9 percent, Japan by 4.6 percent and Luxemberg by 6.9 percent.
Despite the fact indexes at local bourses were touching new historical highs, the numbers on the portfolio investment did not match the mounting index of Karachi Stock Exchange (KSE), as the SBP data showed 74.6 percent decline in portfolio investment to $50.4 million in nine months FY14 as compared to $198.7 million in the same period of last year.
Moreover expected inflow of around $1 billion of FDI from the auction of next generation technologies license also showed a cold response and irritated the government on Tuesday. Oil and gas exploration sector in Pakistan fetched 19 percent lesser foreign investment during the first nine months period to $346.9 million as compared to $426.1 million in same period of FY13. Financial sector received $118.7 million worth of foreign direct investment against $225.7 million over the same period last year.
Telecommunication sector of the country depicted gloomy picture as FDI in this sector remained at negative side to $138.4 million in said period as compared to $331.6 in corresponding period of FY13.

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