Pakistan has witnessed a significant decline in foreign direct investment (FDI) during the first eight months of the current fiscal year, according to the State Bank.
Despite a temporary recovery in February, overall inflows remain considerably lower than last year.
Foreign direct investment stood at $1.19 billion from July to February of the current fiscal year, data released by the State Bank showed.
In comparison, FDI during the same period last year was $1.79 billion, indicating a decline of $598.5 million. This marks a substantial drop in investor confidence and inflows over the year.
Monthly inflows show some recovery
Despite the overall decline, February 2026 saw a noticeable increase in foreign direct investment.
FDI rose to $213.5 million in February 2026, compared to $132.7 million in February 2025. This suggests a short-term improvement, although it was not enough to offset the broader downward trend.
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Total foreign investment also declines
The overall picture of foreign investment also reflects a downward trajectory.
During the first eight months of the fiscal year, the total volume of foreign investment reached $704.1 million. In contrast, this figure stood at $1.58 billion in the same period last year.
Mixed outlook for investment
While the increase in February offers some hope, the sharp decline in cumulative FDI highlights ongoing challenges in attracting foreign investment.
The latest figures suggest that Pakistan will need sustained policy efforts and economic stability to restore investor confidence and reverse the declining trend.
