Karachi, May 16, 2012 (PPI-OT): As a consequence of deteriorating law and order situation and prevailing energy crisis in the country, Foreign Direct Investment (FDI) during the 10MFY12 period has dropped by 48%YoY to USD 666.7 mn as foreign investors have turned faces from making strategic investments in Pakistan.
According to Alfalah Securities Limited, FDI has witnessed a decline of USD 626.1 mn on YoY basis as it recorded an inflow of USD 1.292 bn during the 10MFY11 period. Likewise, the Foreign Investors Portfolio Investment (FIPI) has also registered an outflow of USD 71.6 mn during the 10MFY12 period as compared to an inflow of USD 329mn in the same period last year.
Inflows on account of Net Foreign Private Investment, comprising of both FDI and FIPI, has dropped by USD 1.026bn (63%YoY) to USD 595 mn during 10MFY12 as compared to an inflow of USD 1.622bn in the same period last year. Alfalah Securities Limited believes the situation of falling inflows to Pakistan would improve only if the government adopts adequate economic reforms and come up with proper measures to improve the law and order situation and overcome energy crises.