ISLAMABAD: Pakistan's foreign direct investment rose sharply in August, with net inflows reaching $315.9 million, the highest monthly level in two years, according to government data.
The August figure was about 80 percent higher than a year earlier and 77 percent above July, helped by stronger inflows and lower outflows during the month.
The increase pushed cumulative net FDI for the first two months of fiscal year 2027 to $494.5 million, up 24.1 percent from $398.6 million in the same period last year.
Gross inflows rose 18.4 percent year-on-year to $705.9 million, while outflows increased about 7 percent to $211.5 million. The improvement so far has come mainly from more money entering the country rather than less money leaving it.
China remained the largest source of FDI in both August and the two-month period. The United Arab Emirates was also an important contributor, and Canada emerged as a notable source during the month.
There was some improvement beyond the usual large investors. Net investment from the United Kingdom nearly doubled in the two-month period, while Kuwait's net FDI rose 63 percent year-on-year. Investment from Hong Kong and Switzerland declined, showing the trend remains uneven.
The sectoral picture was similar. Financial businesses attracted the largest net FDI during the first two months of FY27, up about 30 percent. Power followed, though it was slightly lower than a year earlier.
The bigger jumps came from trade and electronics. Net FDI in trade rose more than eightfold to $89.4 million, while electronics attracted $45.7 million, nearly 27 times the previous year's level. Those increases helped broaden the sectoral base of inflows.
But the picture was not uniformly strong. Mining and quarrying, communications, and oil and gas exploration recorded net outflows in the two-month period. Overall, net outflow sectors accounted for $91.3 million, compared with $24 million a year earlier.
The latest FDI numbers are being viewed alongside signs of improving foreign investor interest. Foreign participation in public-sector assets may be returning gradually, helped by the PIA transaction and interest in the FESCO privatization process, but analysts say it is still too early to call this a broad investment turnaround.
FDI remains concentrated in a handful of countries and sectors, while overall volumes are still modest relative to the size of Pakistan's economy. The country has seen short bursts of stronger inflows before, and the challenge has always been turning them into a sustained investment cycle.
For now, the direction is encouraging. August delivered the strongest monthly FDI in two years, cumulative inflows are up, and some new sectors are attracting larger amounts of foreign capital. The real test is whether this will be a one-off or a momentum — and whether it can spread into manufacturing, exports, technology, and other productive parts of the economy.
