ISLAMABAD, Pakistan: The Net Foreign Direct Investment (FDI) in the first half of the current Financial Year 2022-23 (July-December) decreased by 58.7% to US$ 460.9 million from US$ 1,114.8 million as compared to the corresponding period 2021-22 (July-December).
It was apprised to the Senate in a written reply submitted by the Minister Incharge of the Prime Minister’s Office Chaudhry Salik Hussain on Friday in response to a question by Senator Mushtaq Ahmed.
The House was told that as per the Statistics Bureau of Pakistan (SBP) data, during the last year 2021-22, the Net FDI stood at US$ 1,867.8 million which was 2.6% higher than the corresponding period 2020-21 amount US$ 1,820.8 million.
While in the month of February 2022, the FDI decreased by 33.7% to US$ 90.8 million from US$ 137.0 million and the Net FDI during July-October 2022 decreased by 45.5% to US$ 396.0 million from US$ 726.5 million.
The following are the reasons for Decline in FDI:
- COVID-19 pandemic;
- High cost of doing business in the Country;
- Macroeconomic pressures such as Current Account Deficit (CAD) and Balance of Payment Deficit;
- Disruption in food and energy prices due to Russia-Ukraine Crises;
It was further told that the federal government is taking all possible steps and making efforts to attract FDI into the Country and facilitate investors.
The following are the steps being taken to increase FDI in Pakistan:
- Improving business climate through initiatives such as Pakistan Regulatory Modernization Initiative and other sector reforms;
- Supporting establishment of Special Economic Zones (SEZs) to promote industrialization in the Country;
- Online Investment Facilitation Services like facilitating the issuance of Work Visa, approvals of Branch/ Liaison Office, Security Clearance and Issuance of Airport Entry Passes;
- Addressing investor grievance through a special Cell connected to online Portal;
- Creation of Projects Portal and Incentives’ Portal on the Board of Investment’s (BOI) website for the facilitation of potential investors;
