Pakistan FDI Decline FY26: Foreign Investment Drops 51% in Jul–Jan

Pakistan FDI Decline FY26 became clear during the first seven months of the current fiscal year. Foreign Direct Investment dropped by 51 percent year on year.
According to the State Bank of Pakistan, net FDI reached USD 694 million in July-January FY26. However, it stood at USD 1.429 billion during the same period last year. As a result, the country recorded a decline of USD 735 million.

Investment Inflows and Outflows Show Mixed Trend

During this period, total inflows remained at USD 2.1 billion. Meanwhile, outflows touched USD 1.1 billion. On a monthly basis, FDI also dropped sharply. It fell to USD 111 million in January 2026. In comparison, January 2025 recorded USD 226 million. In addition, portfolio investment followed a negative trend. It posted a net outflow of USD 287 million during July-January FY26. Therefore, foreign investment in equity and debt markets remained unstable.

Policy Stability Needed for Long-Term Growth

Analysts believe global economic uncertainty played a major role. At the same time, domestic macroeconomic adjustments affected investor confidence. Experts stress the need for stable policies. For example, long term and investment friendly reforms can improve foreign investor sentiment. Total foreign investment also declined during this period. It includes FDI, portfolio investment, and public investment. Overall inflows dropped by 65 percent to USD 517 million. Previously, they stood at USD 1.484 billion in FY25.

RDA Inflows Offer Some Relief

Despite declining investment, Roshan Digital Account inflows stayed positive. Pakistan received USD 11.923 billion since its launch in September 2020. In January 2026, inflows reached USD 216 million. This figure showed a slight rise from USD 213 million in December. As a result, RDA continues to support foreign exchange inflows.