29/07/2026
Foreign investors are fast losing confidence in Pakistan. Recent SBP data shows that 2025-26 marked one of the weakest inflows of Foreign Direct Investment into Pakistan in three decades. Not only that, even the countries that regularly invest in Pakistan are cutting back.
The numbers speak for themselves. Net inflows stood at just $1.64 billion, equivalent to 0.39% of Pakistan's GDP, down 34% from last year, marking one of the weakest performances in three decades. Equally revealing is the composition of these inflows. China remained Pakistan's largest foreign investor during FY2025-26, contributing USD 862 million, representing approximately 52.7% of total net FDI. Hong Kong followed with USD 339.4 million (20.7%), while the United Arab Emirates contributed USD 235.9 million (14.4%). Yet all three recorded significant year-on-year declines.
Chinese investment fell by 28.5%, declining from approximately USD 1.20 billion in FY2024-25. Hong Kong's investment declined by 27.8%, falling from roughly USD 470 million, while the UAE registered a decline of 19.8% compared to the previous year. Even Pakistan's three largest investment partners are reducing their exposure rather than expanding it. That trend should concern policymakers far more than the headline FDI figure itself because it reflects weakening confidence among investors who already possess firsthand experience of Pakistan's investment environment.
https://profit.pakistantoday.com.pk/2026/07/27/a-strategic-wake-up-call
