IT Sector Fetches $1.6 Million FDI in July 2019: SBP

According to statistics released by the State Bank of Pakistan (SBP), $1.6 million inflow and $0.7 million outflows was registered in the information technology sector during July 2019. The net FDI remained at $0.9 million during this period.

Information Technology sector fetched $1.6 million Foreign Direct Investment (FDI) in July 2019.

The overall communications sector comprising (telecommunication, information technology and postal & courier services) registered $7.8 million net FDI with $24 million inflow and $16.2 million outflows.

Net FDI in software development remained at $0.3 million, with $0.7 million inflow and 0.4 million outflows. Hardware development received no FDI during this period.

FDI inflows for IT services remained at $0.9 million and outflow at $0.3 million thus registering $0.6 million net FDI.

Overall FDI

Pakistan’s foreign direct investment (FDI) inflows plunged by around 59 percent year-on-year to $73.4 million in the first month of the current fiscal year compared to $179 million during the same period of last year, State Bank of Pakistan (SBP) data revealed.

The country received $168.4 million inflows against the outflow of $95.1 million during July 2019.

The net FDI in Pakistan was declined by 50 percent during the last fiscal year (July-June 2018-19) due to slowdown in China Pakistan Economic Corridor (CPEC) inflows.

According to the SBP latest data, the decline in FDI was largely driven by Chinese outflows from the country during the month under review. The Chinese firms pulled $4.5 million from various businesses of Pakistan in July as against the inflows of $90 million in the same month last year.

Other sectors

Sector-wise, oil and gas exploration recorded the highest net FDI of $13.2 million in July, down from $19.6 million in the same month last year. This followed by textile where net investments were recorded at $10.7m and pharmaceutical and OTC products at $10.3m. On the other hand, the power sector posted an outflow of $14.4 million.

Food, power and financial sectors witnessed outflows in the first month of this fiscal year. The power sector, which was the single largest recipient of the CPEC-related net investment flows over the last few years, saw $14.4 million having pulled out from the country. However, foreign firms invested $11.6 million in the power sector in July last year.

Food and financial sectors also witnessed outflows of $5.3 million and $5.4 million in July FY2020, respectively. However, some other sectors, including textile and pharmaceuticals, remained on the investors’ radar.

Pharmaceutical companies received $10.3 million worth of FDI in July FY2020 compared with $2 million in FY2019.

Country-wise FDI

United States was the biggest source of inbound investments during the month, registering net FDI of $16.6m in July, as against $14.4m in the same period last year. Malaysia came in a close second with net inflows of $14.6m, compared to just $2.5m in the same period last year.

Net from the United Kingdom plunged by 78.9pc to $11.1m, from $52.7m in July last year. The biggest outflow was noted from Kuwait at $16.7m, which continued July 2018 trend when the figure stood at $13.8m.

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