By Muskan Naveed ISLAMABAD, Feb. 04 (INP-WealthPK): Investment in general has taken a hit worldwide due to the coronavirus pandemic. In 2020, the global foreign direct investment (FDI) declined by 35% to $1 trillion from $1.5 trillion in 2019. This level has been the lowest since 2005, according to the World Investment Report 2021 by UNCTAD. FDI constitutes a crucial part of developing countries’ economies. Foreign investment in Pakistan had been on a declining trend since 2016-17 – primarily due to political instability and macroeconomic imbalances. The State Bank of Pakistan (SBP) recently released data for FDI in the first quarter of the fiscal year 2022. Pakistan’s FDI registered a growth of 20.1% in July-December, 2022 from the same period last year. During this period, the country’s FDI increased from $879 million to $1,056 million. FDI plays a vital role in filling out the current account deficit which had increased to $9 billion during the first quarter of fiscal year 2022. The increasing trend in FDI may play a vital role in the stabilization of economy. FDI in Pakistan comprises investment in equity, inter-company loan, capital equipment brought in or out of the country, equity in accounts abroad and reinvested earnings. China has the largest share in Pakistan’s FDI. The net inflow from China stood at $306 million with an inflow of $353 million and an outflow of $46 million during this period. The net inflow from China’s Hong Kong  Special Administrative Region to Pakistan was $110 million, that from the United States was $149 million, and from Netherlands $124 million. Sectorial breakdown of FDI The top-three sectors that received the most foreign investment during the first quarter of FY 2022 were electricity, gas, steam and air-conditioning supplies followed by financial and insurance activities and mining & quarrying. Sectors showing the highest growth in FDI from Q1FY2021 were information and communication sector with a jump of 234% and agriculture, forestry and fishing which recorded a growth of 192%. On the other hand, the investment in manufacturing sector fell by 72% and the construction sector also witnessed a fall by nearly half from the first quarter of 2021, WealthPK reported. The data shows that the manufacturing and construction sectors require renewed attention as investment has declined steeply. Total foreign investment Apart from FDI, foreign portfolio investment (FPI) – which is essentially investment in securities and other financial assets of Pakistan – has posted a decline of 25.7%. The decline can be attributed to the growing uncertainty of the Pakistani financial markets amidst the central bank’s persuasion of a contractionary policy and consistent hike of the policy rate. Combined with the foreign public investment – which has grown by 49% during the first quarter of 2022 when compared with the same period of FY2021, the total foreign investment has increased by 47%.