KARACHI: Pakistan’s ll major industrial sectors attracted considerably high foreign direct investments (FDI) during the current financial year indicating an attraction for industrial growth in near future.
The country’s key industries such as textile, chemicals, pharmaceuticals, and electrical machinery saw their inflows jumping by 50-800 per cent.
However, the overall FDI plunged by 51pc during the first nine months of 2018-19 mainly due to outflow of Chinese investments from the local power sector, which in turn eroded the positive impact on inflows in the major industries. Outflow of Chinese investment during the period was $294 million, as compared to net inflow of $929m in same months of last fiscal year.
The highest inflows were recorded in electrical machinery, which attracted $126.6m during 9MFY19 as against $13.8m in corresponding period last year, reflecting an increase of 813pc.
Transport sector came in second as inflows into the sector jumped by 663pc to $84.3m, led by FDI worth $89.6m in cars whereas buses, trucks, vans and trails posted a $5.3m outflow.
Similarly, inflows in chemicals soared by 322pc to $113.9m during 9MFY19 versus $27.6m in same period of 207-18 while those in pharmaceutical rose 274pc to $55m from $14.7m.
The FDI in textile sector clocked in at $54m during the nine-month period, up 50pc over $36.6m in corresponding months of FY18. The sector earns over 60pc of all export proceeds for the country.
For the last couple of years, only two sectors – power and construction – have found themselves on the radar of investors while the rest have seen limited activity in terms of inflows. If latest data is to serve as an indicator for reversal, it could help boost sentiments in the local industry.
Power sector saw a steep decline in FDI as it recorded a net outflow of $293m in 9MFY19 as against $929m in corresponding period last year. Construction also seems to be ceding its gains with inflows shrinking steeply as investment in the sector slowed down to $385.4m, from $527m.
Communications saw a net outflow of $141m, led by telecommunications which recorded outflows worth $157m.