KARACHI: Foreign direct investment (FDI) jumped by 35 per cent in the first half of the current fiscal year as the power sector remained the biggest recipient of these inflows.

The State Bank of Pakistan (SBP) data issued on Wednesday showed that the country received a net FDI of $862.6 million during July-December FY24 against $640m in the same period last year, an increase of $222.6m.

However, the FDI inflows surged six times to $211.1m in December 2023 from just $33.1m in the same month last year. This steep increase made a significant contribution helping the country post a 35pc growth in FDI.

This was also noted that the FDI inflows during the first half were $1,209m slightly lower than last year’s $1,217m in the same period last year. However, the outflows were $346m against $576.8m in 1HFY23.

The biggest attraction for the FDI during the July-December 2023-24 was the power sector which received $433.5m against $439.4m of the last year. It shows that Pakistan is still attractive for investment in the power sector despite growing circular debts.

The oil and gas exploration received an investment of $129.8m in 1HFY24 compared to $70.6m in the same period last year. The financial business was the next attraction as it received $91.1m which was lower than the inflows of $127.3m last year.

China remained the top investor with $292.8m but the amount was less than the previous year’s $333.1m. China is also the biggest trade partner of Pakistan.

The inflows from Hong Kong were higher than the previous year as they rose to $191m during the first half of FY24 against $116.6m of last year.

The inflows from the UK and US were $120.7m and $127.9m respectively. Another significant inflow was from the Netherlands with $69.4m. However, the biggest disinvestment was noted from Norway as the outflow was $110m.

Despite 35pc higher inflows of FDI, the amount remained below $1bn in the first half of this fiscal year. Pakistan has been receiving the lowest amount of FDI compared to other regional countries (except Afghanistan) for the past many years.

Published in Dawn, January 18th, 2024