By Abdul Ghani

Pakistan received net foreign direct investment (FDI) of $1.2 billion during Jul-Feb FY2026, with China emerging as the largest contributor and the power sector attracting the highest inflows, according to the Monthly Economic Update & Outlook released by the Finance Division.

China accounted for $635.7 million of total FDI inflows during the period, making it the leading source of foreign investment.

Sector-wise, the power sector attracted the highest share of FDI, receiving $627.4 million. This was followed by financial business, which recorded inflows of $523.2 million during the period.

The inflows into these sectors indicate continued investment activity in energy and financial services, contributing to overall capital formation in the economy.

Despite the inflows, overall foreign investment showed mixed trends. Portfolio investment recorded net outflows during the period, with private portfolio investment declining by $365.6 million and public portfolio investment showing outflows of $125.2 million.

Total foreign investment stood at $704.1 million during Jul-Feb FY2026, reflecting the impact of portfolio outflows despite positive FDI inflows.

The data shows that while FDI continues to support the external sector, other forms of investment remain under pressure.

At the same time, sectoral distribution indicates that investment remained concentrated in a few key areas, particularly power and financial services.

The report indicates that FDI inflows contributed to the overall external account, alongside remittances and other financial flows, helping support the country’s foreign exchange position.

Overall, foreign direct investment during Jul-Feb FY2026 reflects continued inflows into key sectors, even as broader investment trends remain influenced by outflows in portfolio investment.

Credit: INP-WealthPk