Foreign investment in Pakistan recorded a sharp decline during the first nine months of FY2026. According to data from the State Bank of Pakistan, total foreign investment fell by 73 percent. It dropped to 411 million dollars compared to 1.5 billion dollars in the same period last year.
The data shows that Foreign Investors reduced their overall exposure in Pakistan’s economy. This decline reflects weaker inflows compared to the previous fiscal period. Despite some monthly improvements, the overall trend remained negative.
Net foreign direct investment (FDI) showed mixed performance. In March 2026, net FDI reached 168 million dollars. This is higher than 64 million dollars recorded in March 2025. However, it was lower than 214 million dollars in February 2026.
On a cumulative basis, net FDI for the first nine months of FY26 stood at 1.355 billion dollars. This reflects a 27 percent decline compared to the same period last year. It shows that Foreign Investors are still cautious about long-term commitments.
Outflows also increased during March 2026. Investors withdrew 285 million dollars from Pakistan. This is a sharp rise of 321 percent compared to 68 million dollars in the same month last year. These withdrawals added pressure on overall investment figures.
Despite the decline, some inflows were recorded from key countries. China, Hong Kong, and Japan were among the largest contributors in March. These countries remained active participants among Foreign Investors in Pakistan’s economy.
Sector-wise data shows that the power sector attracted the highest investment. Financial businesses also received notable inflows. These sectors continued to draw interest from Foreign Investors despite broader market weakness.
Economists say the overall drop in investment reflects global and domestic challenges. Uncertainty in economic conditions may have influenced investment decisions. This has led to cautious behavior among international investors.
The report highlights that total foreign investment flows remain under pressure. Compared to last year, the performance shows a clear downward trend. However, monthly fluctuations suggest that some recovery is still possible.
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Overall, the data indicates reduced confidence among Foreign Investors in the short term. Authorities may need to focus on improving stability and investor confidence. This is important for attracting sustained foreign capital in the coming months.
