According to the State Bank of Pakistan, foreign direct investment (FDI) in Pakistan recorded a significant decline of 43 percent during the first half of the current fiscal year (FY26).
State Bank data shows that during July to December of FY26, the country received 808 million dollars in FDI, compared to 1.425 billion dollars in the same period of the previous fiscal year (FY25). This reflects a decline of 616 million dollars in FDI. During the period under review, total FDI inflows stood at 1.813 billion dollars, while outflows were recorded at 1 billion dollars.
On a monthly basis, a net outflow of 134.7 million dollars was recorded under FDI in December 2025, whereas an inflow of 182.4 million dollars was recorded in December 2024. According to sources, the main reason for the large net outflow in December was the withdrawal of investment by a Norwegian company from the telecom sector. This was largely due to Telenor’s exit from Pakistan and the sale of its assets to PTCL, which accounted for most of the outflows during the month.
Sector wise data shows that the power sector, which holds the largest share in overall FDI, declined sharply during July to December of FY26 to 470.9 million dollars, compared to 780.1 million dollars in the same period last year.
On the positive side, FDI in the financial sector increased, rising to 401.5 million dollars in the first half of FY26, compared to 368.2 million dollars in the same period last year. This indicates that despite the overall decline, investor interest in banking and financial services has remained intact.
Meanwhile, the telecommunications sector recorded large outflows of 431.3 million dollars during the first half of FY26, compared to outflows of only 64.8 million dollars in the same period last year, reflecting the impact of large scale divestment.
Foreign investment in the food sector also increased significantly, rising to 50 million dollars during July to December of FY26, compared to 18 million dollars in the same period of the previous fiscal year.
In addition, despite improved performance in the equity market, portfolio investment during the first half of FY26 stood at 225 million dollars.
Overall, total foreign investment in the country, including FDI, portfolio investment, and public private investment, amounted to 207 million dollars in the first half of the current fiscal year, compared to 1.343 billion dollars in the same period last year.
