Pakistan’s economic landscape saw a notable boost in October 2025 as the financial business sector emerged as the top performer in attracting foreign direct investment, receiving a net inflow of $79.62 million, according to the latest figures shared by the State Bank of Pakistan. The month’s data reflects renewed investor interest in segments linked to financial services and digital transformation, indicating that confidence in Pakistan’s evolving financial architecture remains resilient despite broader global uncertainties.
Following the financial business sector, the power sector secured the second-highest net FDI during October, drawing in $52.77 million. The category labeled “Others” ranked third, with foreign investors bringing in $27.91 million across diverse activities grouped within this segment. These inflows collectively contributed to a more balanced investment pattern across multiple sectors, showing that foreign investors continue to view Pakistan as a viable frontier market for long-term positions.
However, the communications sector recorded the sharpest downturn in October, with a net outflow of $11.26 million. This reversal highlights ongoing structural and regulatory challenges in the segment, where shifting technology costs, infrastructure hurdles and competitive pressures continue to shape investor decisions.
Looking at the broader four-month period of FY26, the power sector maintained its lead with cumulative net FDI of $297.04 million. Although this figure marks a substantial decline compared to the $594.81 million recorded during the same period last fiscal year, the sector continues to be a primary destination for foreign capital due to Pakistan’s expanding energy requirements and ongoing infrastructure upgrades.
The financial business sector followed closely with cumulative net inflows of $259.83 million during the first four months, slightly above the $241.32 million reported in the corresponding period of FY25. The sustained interest suggests that the sector is benefiting from increased digital payments activity, banking modernization efforts and rising demand for fintech-enabled services.
The sector collectively categorized as “Others” secured the third position with $76.84 million in net FDI during 4MFY26. This marks a 25.4 percent year-on-year growth compared to the $61.27 million inflow recorded in the same period of the previous fiscal year, reflecting greater diversity in investment choices across smaller but emerging industries.
Among the sectors facing divestment, mining and quarrying experienced the highest negative FDI balance at $24.77 million in the first four months of FY26. Despite this outflow, the figure still represents an improvement compared to the significantly deeper negative balance of $101.76 million recorded during 4MFY25. The transport equipment sector, primarily associated with the automobile industry, followed with a divestment of $23.06 million, widening from the $10.84 million outflow in the same period last year. The construction sector also faced a reduction in foreign investment, posting an outflow of $10.96 million, though this was lower than the $13.63 million divestment reported in the previous fiscal year.
In October alone, Pakistan registered total net FDI of $178.93 million. On a cumulative basis, FDI for the first four months of FY26 has reached $747.73 million. However, this remains lower compared to the $1.01 billion reported during the same period last fiscal year, indicating that while inflows continue, foreign investment has not yet returned to last year’s pace.
The latest figures highlight the shifting dynamics of Pakistan’s investment climate, with financial services and power-related ventures continuing to draw interest, while other sectors encounter uneven performance. As global investors navigate evolving economic conditions, Pakistan’s ability to maintain policy stability and support sectoral reforms will remain essential in sustaining the upward trajectory of foreign capital inflows.
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