Amid the poor economic health and political instability in the country, cash-strapped Pakistan’s Foreign direct investment (FDI) has plunged 52 percent during the first four months of the current fiscal year (FY23). On Monday, the Pakistan State Bank issued the latest data, showing the FDI fell to USD 348.3 million in July-October FY23 from USD 726.5 million during the same period of the last fiscal year (FY22), the Dawn newspaper reported. According to the Dawn report, the FDI has been declining each year while the volume of investment is also very thin compared to that of regional countries like India, Bangladesh and China. Notably, the highest FDI of USD 74.8 million came from China during the first four months of the fiscal year. The Pakistani daily said China has been the biggest investor for the past several years, but its investment has started declining as reflected in the comparative figures for two years. Meanwhile, the FDI inflows from the UAE increased to USD 67.6 million in the first four months, from USD 51.4 million, during the same period last year. This report comes as Pakistan’s Planning Minister Ahsan Iqbal on Sunday rejected reports related to the country’s default risks. Iqbal termed them as “propaganda” of Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party. The Pakistan federal minister made the remarks after Imran raised alarms about the economic situation in Pakistan, stating that the Shehbaz Sharif government is not able to control it.
“The news about Pakistan’s default risk is based on a malicious campaign initiated by the PTI which has no reality,” Iqbal was quoted as saying by Dawn, in an address at the Pakistani Consulate in Jeddah.
“The PTI destroyed the country’s economy which led to an economic crisis but the incumbent government has improved the economy by following the agreement with the IMF (International Monetary Fund) and for the last six months, Pakistan has adopted a path of stability,” Iqbal added.
Meanwhile, policy research group POREG reported Pakistan’s economy is in a state of free fall, and its weak coalition government led by Prime Minister Shehbaz Sharif is helpless to save its falling GDP.
Looking at its falling economy, investors had also started losing their confidence in Pakistan’s ability to pay back the loans. Neither, the creditors nor the market is impressed. The creditors were not impressed by the official assertions that the “land of the pure” will not default and will meet its upcoming USD 1 billion bond payments, according to POREG.