Foreign investment drops by 30pc in first half of FY21.

KARACHI -- Foreign direct investment (FDI) fell by 30 per cent in the first half of the current fiscal year, reflecting the impact of Covid-19 that is still affecting the country as well as global economies.

The State Bank's latest data issued on Monday showed the country received $952 million foreign investment during July-December FY21 compared to $1.357 billion in the same period of last fiscal year.

In FY20, Pakistan managed to improve its track record as it received $2.561bn FDI compared to $1.362bn in the preceding year. However, the pandemic drastically impacted global economies suppressing any chance for Pakistan to attract huge amounts of foreign investment.

The impact of heavy outflow from portfolio also played a key role in making the balance sheet poorer in the first half of FY21. The data shows that the outflow during July-December was $244m compared to a net inflow of $18.8m in the same period last year.

Inflows from China also shrink in July-December

The breakup further shows that China made 38pc contribution to the overall $952m FDI the country received in July-December period of FY21. However, the FDI inflows from China also contracted to $359m in the period under review compared to $396m in the same period of last...