Pakistan witnessed a significant decline in Foreign Direct Investment (FDI) during the first five months of FY2025-26. Net FDI stood at $927 million, down 25 percent compared to $1,242 million in the same period last year.
In November 2025, Pakistan recorded FDI inflows of $270 million. This was 44 percent lower than the $481 million inflows in November 2024. During the same month, FDI outflows decreased to $91 million, down 64 percent from $232 million the previous year.
China remained the largest contributor, investing $82 million in Pakistan in November. Other major sources included Hong Kong at $23 million, Switzerland at $17 million, and other countries combined at $15 million.
Sector-wise, the Power sector attracted the highest FDI during November, receiving $87 million. The Financial Business sector followed with $68 million, while the Personal Services sector secured $9 million in investments.
Analysts attribute the decline in FDI to global economic uncertainties and regional challenges affecting investor confidence. Despite this decrease, strategic sectors such as energy and finance continue to draw foreign investment.
The government of Pakistan is expected to implement measures to improve the investment climate. Policies focusing on ease of doing business and stronger investor protection are likely to help attract more capital.
Experts suggest that targeted incentives and consistent monitoring of investment trends could help Pakistan recover its FDI inflows. They also stress the importance of diversifying investment sources to reduce dependency on a few countries.
The November figures show that China, Hong Kong, and Switzerland remain key partners in Pakistan’s investment landscape. Their continued involvement is expected to play a crucial role in stabilizing and increasing FDI in the coming months.
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With ongoing policy support and sector-focused incentives, Pakistan aims to regain momentum in foreign investment and ensure sustainable economic growth.
