Home Business Country’s foreign investment surges 68.3% to $1.340bn in July-Dec 2019-20

Country’s foreign investment surges 68.3% to $1.340bn in July-Dec 2019-20

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KARACHI: Country’s Foreign Direct Investment surged by 68.3 per cent to $1.340 billion in first half of current fiscal year (July-December 2019-20) compared to $796.8 million in the same period last year, the data released by the State Bank of Pakistan (SBP) here on Thursday.

In December 2019 alone, the direct investment increased to $487 million compared to $319.5 million in same month 2018.

However, the total investment of the country has jumped to $1.811 billion in last six months compared to $377 million in the same period last year, SBP data said.

The market experts said that the investment is foreign investment is showing a upward trend as the national economy showing signs of recovery and stability. The foreign investors are coming in the stock markets.

According to the data, total portfolio investment surged to $18.8 billion in July-Dec 2019-20 against (negative) $419.8 million.

Fitch Ratings, the American credit rating agency has affirmed Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook.

The ‘B-‘ rating reflects a challenging external position characterised by a high external financing requirement and low reserves, weak public finances including large fiscal deficits and a high government debt-to-GDP ratio, and weak governance indicators, said Fitch.

The agency said that progress is being made towards strengthening external finances and positive steps have been made on the fiscal front, but considerable risks remain, the Fitch said.

The agency forecasts a further narrowing of the current account deficit to 2.1 per cent of GDP in the year ending June 2020 (FY20) and 1.9 per cent in FY21, from 4.9 per cent in the last fiscal year. Import compression remains the predominant driver of the narrowing deficit, facilitated by a depreciation of the rupee against the US dollar of around 30pc since December 2017 and tighter monetary conditions. Exports are forecast to grow modestly from a low base.

The SBP data said that Foreign Public investment enhanced to $452.2 million in the same period compared to $0.1 million in the same period of last year.

China remained the largest investor in Pakistan. It invested $422.5 million in last six months of 2019.

China has continued to invest billions of dollars in Pakistan under China-Pakistan Economic Corridor (CPEC) projects. The completion of first phase of CPEC has caused a slowdown in investment from Beijing for the time being, the analyst said.

Norway was remained on the 2nd largest investors position in last six-month as it invested $288.5 million compared to $110 million in the same period last year. Malta made a huge investment and appeared on 3rd large investor with $111.1 million compared to $70 million last year.