Foreign investment up by 237 percent in July

M ISRAR KHAN

ISLAMABAD (August 24 2005): The State Bank of Pakistan (SBP) on Tuesday reported that total foreign investment in the first month of 2005-06 increased by 237 percent to $161.4 million from $67.9 million in the corresponding month of last year.

During the period, foreign direct investment (FDI) increased by 229 percent year-on-year to $119.6 million and portfolio investment 266 percent to $41.8 million. It is pertinent to note that during 2004-05, total investment inflow has crossed $1.67 billion mark as against $0.921 billion in 2003-04.

Country-wise breakdown of investment shows that the United States was the biggest investor in Pakistan with total investment of $64.1 million during July, 2005, or $31.2 million FDI and $32.9 million portfolio investment.

The United Arab Emirates (UAE) is next with total investment of $26.8 million, including FDI of $23.4 million and $3.4 million portfolio investment. However, in terms of portfolio investment, UAE was third while the United Kingdom (UK) occupying the second position with $5.9 million.

A significant feature of the data is that the US portfolio investment showed a high growth: in July alone, it grew to $32.9 million from $5.7 million as compared to corresponding month last year. Besides, FDI also grew to $31.2 million from $16.1 million.

The UAE's direct investment jumped to $23.4 million as it was minus $14.1 million in July last year. However, its portfolio investment declined to $3.4 million from $12.8 million last July.

FDI from Netherlands was also sizeable: at $12.7 million, but its portfolio investment was minus $2. From UK, it is $11.3 million as against $13.5 million in July last year.

As there is a direct link between the inflow of foreign investment and political and economic stability, government circles are hoping further improvement in foreign investment, especially with the rise in macroeconomic indicators and improvement in infrastructure.

Copyright Business Recorder, 2005