Foreign investment inflows in Pakistan up 80pc in August

Pakistan’s net foreign direct investment (FDI) jumped 80 percent year-on-year to $316 million in August, the country’s financial advisor said on Sunday, calling it a “positive signal” as Islamabad transitions from macroeconomic stability to investment-led, sustainable development.

The $316 million foreign investment inflows was the greatest monthly level reached by the country in the last two years, while it marked a 77 percent increase on a month-on-month basis, Khurram Schehzad, an assistant to Finance Minister Muhammad Aurangzeb, said in a post on X.

The increase was backed by better investment inflows from China, Canada and the UAE, along with a reduced repatriation and outflows, leading to a much stronger net FDI position during the month,” he said.

Pakistan’s net FDI plummeted 34 percent to $1.64 billion or 0.39 percent of gross domestic product in the Fiscal Year 2025-26 that ended in June, according to World Bank data.

This was far below the previous average of about 2 percent of GDP for Emerging Market and Developing Economies and much below the roughly 5 percent peak reported in 2008.

For policymakers, investment promotion should not cease after an investor joins the nation, said the former minister.

“It’s about shifting investment, thinking from measuring capital flows only to understanding how capital creates enduring economic capability.”

Consumer prices in Pakistan surged to 11.1 percent in August from 9.2 percent in July, exceeding the central bank’s medium-term inflation target of 5-7 percent further.