China leads foreign investment in Pakistan amid modest growth in FDI

ISLAMABAD: China was the top foreign investor in Pakistan in March 2025, injecting $22.74 million in net direct investment, according to data released by the State Bank of Pakistan (SBP). The United Kingdom followed with $19.26 million, while Switzerland contributed $15.74 million during the month.

Cumulatively, in the first nine months of the current fiscal year (July–March), foreign direct investment (FDI) in Pakistan rose to $1.64 billion, reflecting a 14 per cent increase compared to $1.44 billion recorded during the same period last year.

China remained the dominant investor during this nine-month period, with a total net FDI of $684.52 million—accounting for more than 41 per cent of the total. Investment from China more than doubled year-on-year, rising by 107 per cent from $330.32 million in the corresponding period of FY24.

The United Kingdom ranked second with an investment of $186.27 million, representing around 11.3 per cent of total FDI. This marked a marginal increase of 4 per cent from $178.97 million in the same period last year.

Hong Kong emerged as the third-largest contributor, investing $175.89 million—around 10.7 per cent of the total FDI. Its investment showed a year-on-year increase of over 14 per cent.

Other notable contributors included Switzerland ($146.89 million), various other countries grouped as “Others” ($114.98 million), and the UAE ($88.46 million).

However, foreign portfolio investment (FPI)—which reflects activity in the stock market—remained in negative territory. In March alone, Pakistan saw a net outflow of $131.4 million in FPI. Over the nine-month period, total net FPI recorded a divestment of $342.35 million, a stark reversal from the $164.95 million inflow during the same period last year.

Despite this, the United States stood out as the largest portfolio investor, with $4.12 million invested in March and $112 million over the nine months.

Read next: Intraday trade: PKR up by 17 paisa against USD