Pakistan's foreign investment funding plunges 32.5 pc in 10 months

The foreign investment flow into Pakistan has significantly slumped by 32.5 per cent to USD 1.55 billion in the first 10 months of the current fiscal year, as per ANI citing a new report carried by the Pakistani daily The Express Tribune found. This implies a monetary disaster for the country as its already battered economy from the COVID-19 pandemic will further topple the financial flow into its vital sectors such as energy, telecommunication, oil, and fuel exploration, which have been moderate in its international funding at 1.55 US billion dollars between July 2020 to April 2021. Last year, the country had received a USD 2.3 billion inflow of foreign direct investment (FDI), as per the estimates of the State Bank of Pakistan (SBP). 

"FDI inflows into Pakistan remain moderate," Pak-Kuwait Investment Company Head of Research Samiullah Tariq told The Express Tribune, as cited by ANI. "They should grow over the next one year in the wake of stability in the rupee-dollar parity and improvement in the balance of payments position in FY21,” he added. Furthermore, he said that Pakistan’s Special Economic Zones (SEZs) projects have been under various developmental phase and received FDI fundings. 

Just about last month, Pakistan’s foreign investment declined by 40 per cent and totalled to approximately 35 per cent total dip as compared to the cash inflow nine months ago. SBP data suggests that the FDI inflow in March was USD 167.6 million that declined from the previous USD 278.7 million funding the month before. The trend has reflected no improvement for investors, the State Bank of Pakistan said in a statement. It attributed the downfall to the COVID-19 situation that has fluctuated the global market. 

Country on FATF 'Grey List'

Pakistan has been on the 'Grey List' of the Financial Action Task Force (FATF) as the international intergovernmental organization that funds G7 stated earlier that it does not demonstrate 'effective implementation of targeted financial sanctions against all its designated terrorists. As per the agency, Pakistan needed to complete its action plan following which the FATF would verify the implementation and sustainability of its moves. Until then, it decided to retain Pakistan on the “greylist” up until the next performance review during the June Plenary session. 

At a press briefing, FATF president Marcus Pleyer told a press briefing that even as Pakistan had made significant progress, it had still failed to "fully comply" with three of the 27-point action plan, and demanded that the country takes effective steps to elude the foreign financial sanctions and penalties.