Net FDI to Pakistan continues to contract in cement and construction in 9MFY20

The State Bank of Pakistan (SBP) has released foreign direct investment (FDI) data for the nine months of the current financial year 2019-20 and March 2020. It shows that the country received a higher FDI of US$2.696bn against US$2.146bn in the corresponding July-March period of the last fiscal year of 2018-19. The March alone it attracted US$319.8m.

However, in 9MFY20 net FDI amounted to US$2.148bn, up 137 per cent from US$905.1m in the corresponding period of the last fiscal year.

China transferred the highest net FDI of US$872m, Norway US$289m, Hong Kong US$135.1m and others.

However, the increasing FDI trend is yet to reflect in the country’s construction and cement sectors, which still lag behind other industries.

Pakistan’s cement and construction sectors have recorded a drop in net FDI of 56 per cent to US$40.6m in the 9MFY19-20, compared to US$92m in the corresponding period of last year. Of this total, the cement industry attracted an investment of US$29m and the construction sector US$11.6m, compared to US$36.4m and US$55.6m, respectively in the year-ago period. This represents a decline of 20.3 and 79.1 per cent in the cement and construction sectors, respectively. In March 2020 alone, both sectors attracted a total net FDI of only US$4.2m.

Pakistan’s government earlier this month announced a stimuli for construction sector and expects a considerable long-term investment into the country as no sources of investment would be asked until later this year.