Pakistan recorded a significant increase in Foreign Direct Investment (FDI) during May 2026, with net inflows reaching $214 million, according to the latest figures released by the State Bank of Pakistan (SBP).
The latest data shows that FDI increased by 293 percent on a month-on-month basis, compared to $55 million recorded in April 2026. However, despite the strong monthly recovery, FDI remained 8 percent lower than the $233 million recorded in May 2025.
Market analysts noted that April’s lower FDI figures were partly influenced by capital outflows in the cement sector, particularly due to the divestment by Attock Cement. The absence of similar outflows in May contributed to the sharp rebound in investment inflows.
Despite the monthly improvement, cumulative FDI during the first eleven months of fiscal year 2025-26 (11MFY26) stood at $1.623 billion, reflecting a 28 percent decline compared to the same period last year.
Country-wise, the largest contributors to Pakistan’s FDI inflows during May were China, the United Arab Emirates, and Hong Kong, highlighting continued investor interest from key regional partners.
Sector-wise, the power sector and financial businesses attracted the highest levels of foreign investment during the month, underscoring sustained confidence in Pakistan’s energy and financial industries.
Meanwhile, total foreign investment, which includes both foreign private investment and foreign public investment, reached $446 million in May 2026. This represented a substantial 336 percent increase compared to the same month last year.
However, cumulative total foreign investment during 11MFY26 amounted to $478 million, marking a 69 percent decline from $1.56 billion recorded during the corresponding period of fiscal year 2024-25.
Economists believe the sharp rebound in May’s FDI figures is a positive signal for investor sentiment, although sustained inflows will be necessary to reverse the broader downward trend seen during the current fiscal year.
