Another Proof of Investors Losing Confidence: Mere $73.4m FDI In July
There is not a single day when we are not reminded that the investors have lost confidence and Pakistan’s economy is in a serious crisis as a result of economic instability courtesy devaluation, increase in utilities’ prices and higher cost of doing business. And a latest story published by The Express Tribune is another proof.
The reporter, Salman Siddiqui, in his report said foreign direct investment (FDI) had plunged to a nine-month low at $73.4 million in July 2019, the first month of the current fiscal year 2019-20, according to the State Bank of Pakistan (SBP). The figures were 59 per cent lower than the $178.9 million in the same month of previous fiscal year.
Earlier, the FDI had dropped to half at $1.66 billion in the last fiscal year compared to investment of $3.47 billion in 2017-18.
The political uncertainty triggered by the Panama Papers case and the removal of Nawaz Sharif from the office has led Pakistan into this mess.
His economic team led by Ishaq Dar had resisted the pressure to devalue the currency, saying that it would have devastating consequences for economy.
However, once they were out of the office, the devaluation came into effect along with an environment that is not business friendly.
According to The Express Tribune, an industry source said a slowdown in the economy had badly impacted business confidence.
“It is a must for the authorities concerned to first create an enabling environment for the local businessmen desiring to make new investment. Foreign investors may follow suit,” he pointed out.
He cited the plunge in car sales, losses or a drop in profit faced by petroleum oil refineries, oil marketing firms and fast moving consumer goods manufacturers as some of the reasons why foreign investors held back new investment plans for Pakistan.
“Most of such companies listed at the Pakistan Stock Exchange have either suffered losses or recorded a significant drop in profits due to economic uncertainty,” the source said.
The government’s demand to print retail prices on imported goods and the condition of collecting computerised national identity card (CNIC) copy at wholesale and retail levels had further dented the business confidence, he said.