Increased FDI inflows in Pakistan yet to positively impact cement

According to data of the State Bank of Pakistan, Pakistan has received a net total foreign direct investment (FDI) of US$850.01m during first five months of current financial year (July and November 2019), compared to US$477.3m received in same months of the previous year. This represents an increase of 78 per cent YoY, mainly due to a high inflow from Norway and China between July and November 2019.

However, this increasing trend in FDI was poorly reflected in the investment in the country’s construction and cement sectors. The cement and construction sectors have received net FDI of US$26.1m in 5MFY19-20 compared to US$262.9m attracted in corresponding period last year. This shows a negative trend of 90.1 per cent. The breakdown shows that the cement industry attracted an investment of US$18.6m and construction sector US$7.5m in 5MFY19-20, compared to US$20.2m and US$242.7m in same five months in the year-ago period. It represents a fall of 7.9 and 97 per cent in cement and construction sectors, respectively.

In November 2019 alone both sectors attract a total FDI of US$4.6m.

Meanwhile, the Pakistani government is hoping to receive a substantial inflow of FDI in the remaining months of the financial year due to improvements at the macroeconomic level.