Tuesday, August 16, 2011

Foreign investment in Pakistan , on a decline

Total foreign investment in Pakistan fell 60% in the first month of July of fiscal 2011-12 to $62 million, because of a decrease in both foreign direct investment and foreign portfolio investment, the SBP said on Monday.

Total foreign investment  was earlier $157.8 million in July 2010.

Foreign direct investment fell 17% in July 2011 to $91 million from $110 million in the same period last year, the State Bank told.

Pakistan's unstable security, a Taliban insurgency in the country's northwest and chronic power shortages have put off long-term investors, analysts say.

Death toll in Karachi in July was abot 300 , as Karachi is  country's main commercial hub , the law and order situation made  investors nervous and they started shunning the country's main stock exchange KSE.

Foreign portfolio investment fell 160% with outflows of $29 million in the first month of July 2011 , compared with inflows of $48 million in the same period of 2010.

Pakistan has struggled with a troubled economy since 2008 like most of the nations in the world and an International Monetary Fund (IMF) emergency loan package agreed to in November 2008 that helped it avert a balance of payments crisis and increased reserves to a healthy level. Remittances from overseas Pakistanis supported the economy a great deal and they have good increasing trend every month. Currently their average is $ 1.1 billion per month which is a very healthy sign.

Pakistan received the fifth tranche of $1.13 billion of the $11 billion loan in May 2010.  (Reuters)

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