KARACHI: Foreign direct investment (FDI) plunged year-on-year by 41 per cent in the first seven months of 2025-26.

Data issued by the State Bank on Wednesday showed that the confidence of foreign investors further declined compared to the previous year, as their investment during July-January FY26 fell to $981 million from $1.660 billion in the same period of the previous fiscal year.

Experts believe foreign investment will remain under pressure, as the regional situation is not conducive to foreign investors, and the country is also facing terrorism.

The government is struggling to attract foreign investors but failed to achieve any positive results. The State Bank data showed that the highest FDI inflows came from China at $495.5m; however, this was lower than last year’s $857m.

Other significant inflows were from Hong Kong ($188.4m), the UAE ($126m), and Switzerland ($124m).

The inflow of FDI improved in January, reaching $173.3m, but the largest inflow this month was from China, contributing $73m.

However, the largest outflow was to Norway, with disinvestment totalling $365m during the July-January period.

Published in Dawn, February 19th, 2026