WEB DESK: Foreign Direct Investment significantly increased during April 2024, recording net inflows amounting to $359 million. This uptick comes amidst a marginal 8.1 percent year-on-year rise in FDI for the fiscal year 2024, totaling $1.46 billion.
Despite the overall increase in FDI, the power sector, a primary recipient of foreign investment, experienced a decline in absolute value compared to the previous fiscal year. Concurrently, sectors such as telecom/IT and financial businesses witnessed diminishing net flows, posing challenges to broadening the investment base.
Furthermore, the amplification of FDI in Pakistan, particularly within the energy sector, is heralded for injecting much-needed capital and fostering technological advancements. This influx of investment is seen as instrumental in facilitating infrastructure development and expanding capacity across various industries.
Moreover, analysis of FDI trends over recent years reveals a pattern of stagnation, with net flows remaining modest and concentrated within select sectors and countries. China’s continued dominance in Pakistan’s FDI landscape, particularly in the power sector and the early phases of the China-Pakistan Economic Corridor (CPEC), underscores the significance of bilateral economic relations.
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FDI in the energy sector is highlighted for its role in addressing chronic energy shortages, improving efficiency, and enhancing the reliability of energy supply, all crucial elements for sustainable economic growth. Moreover, investment in the energy sector contributes to job creation, skill development, and the modernization of infrastructure, positioning Pakistan for long-term competitiveness in the global market.
Experts emphasise the need for a conducive environment to attract FDI in the energy sector, emphasizing its pivotal role in meeting Pakistan’s growing energy demands, driving economic development, and ensuring energy security. As Pakistan navigates its economic landscape, diversification and strategic partnerships will be key to unlocking its full potential.
