FDI: the implementation issues

The FY24 saw net foreign direct investment (FDI) rise to $1.9 billion from $1.63 billion in FY23. FY24 also saw $1.1 billion in FDI outflows compared with $941 million in FY23. Foreign portfolio investment (FPI) registered outflows of $382.5 million during FY24 compared with $1 billion during FY23. Despite maintaining a high interest rate, the economy couldn't attract, or even hold, short-term capital mainly because of exchange rate volatility. Likewise, despite offering an attractive incentive package, the country could not win the confidence of foreign investors, interested in long-term commitment through the FDI. Between FY20 and FY24, the economy saw cumulative FDI outflows of $4.72 billion against the cumulative net FDI of $9.9 billion. China has remained the largest source of FDI into Pakistan, with $2.65 billion worth of capital inflows (26.8% of the total) during the last five years.