Pakistan struggles to attract foreign investment

Despite a significant increase in the percentage of foreign investment during the July-October period of fiscal year 2025, inflows declined by 20% in October due to unexpected law and order issues in the country.

The State Bank of Pakistan (SBP) shared statistics related to inflows, showing that foreign direct investment (FDI) rose 32 percent to $904 million during July-October FY25 compared to $683 million in the same period of last year. 

Experts declared FDI volume insufficient compared to expectations, as it declined by 20 percent in October year-on-year to $132 million, raising questions over the country’s economic condition to attract foreign.

The inflows through FDI remained disappointing for the government, which has been striving to attract foreign investors by offering several incentives. 

China has the biggest contribution of $414.5 million, which is 46 percent of total FDI inflows during the period under review. Other significant investments were made by $99.7m from Hong Kong and $94m from the UK.

The trade and industry sources attributed the decline to the deteriorating law and order situation in the country, which is a key reason for this disappointing FDI.