Pakistan Industrial and Traders Associations Front (PIAF) has raised concern over the falling Foreign Direct Investment (FDI) in the country.PIAF issued a presser in which it said that FDI in the country decreased by 47% to USD253 million in the first quarter of the current fiscal year i-e 2022-23.

PIAF Chairman, Faheem-ur-Rehman Saigol, in a joint statement along with Senior Vice Chairman, Nasrullah Mughal and Vice Chairman, Tahir Manzoor, observed that the inflows under the FDI recorded a 31.7% decline to USD395 million during the quarter under review as compared with USD579 million in the same quarter of the last year.

Faheem-ur-Rehman Saigol said that the total foreign private investment into the country fell by 36.3% to USD241.3 million during the quarter under review when compared with USD379 million in the corresponding quarter of the last fiscal year. The portfolio investment in the capital market registered a massive decline in outflows during the quarter under review.

The outflows of portfolio investment recorded at USD12.1 million during the first quarter of the current fiscal year as compared with the outflows of USD100.5 million in the same quarter of the last year. The foreign public investment under the head of debt securities recorded an outflow of USD18.2 million during the first quarter of the fiscal year 2022/2023 as compared with the inflow of USD980 million in the same quarter of the last fiscal year.

The total foreign investment including private and public recorded a decline of 83.6% to USD223 million during the first quarter of the current fiscal year as compared with USD1.36 billion in the same quarter of the last fiscal year.Saigol said that China has been the leading investor in Pakistan for the past many years and is a major contributor to the increase in the size of FDI.

However, the new fiscal-year-23 may drag down the inflows from elsewhere due to economic slowdown in developed countries, he warned. He said, “Pakistan has always remained a potential market for foreign investors, who still have plans to make fresh investments in the country, but they have continued to wait for the return of economic stability.”

“Uncertainty in the rupee-dollar parity is one of the major concerns of foreign investors. An enabling environment should be created by the government for businesses to flourish and for investments to pour in.” He suggested that immediate measures should be taken to increase the tax-to-GDP ratio of the country.

Meanwhile, he called on the business community to diversify their industrial bases and to keep their operations going in the current tough economic times. He also advised the ministry to devise strategies for promotion of Pakistani products, calling upon trade officers to take advantage of opportunities offered by China-Pakistan Economic Corridor (CPEC). He said, “foreign investors prefer to pour their money into the sectors which do not pose a risk to their profit margins due to rupee depreciation, such as the power sector.”

Credit : Independent News Pakistan-WealthPk