The official financial data released by the State Bank of Pakistan reveals that China has maintained its position as the primary source of foreign direct investment for Pakistan during the month of May 2026. According to the central bank metrics, China registered a net direct investment of 79.3 million dollars over the course of the month. This monthly inflow was closely followed by capital contributions coming from the United Arab Emirates and Hong Kong, which injected net direct investments of 50.5 million dollars and 27.1 million dollars respectively into the domestic financial ecosystem.
When examining the long-term trends on a cumulative basis for the first eleven months of the fiscal year 2025-26, China consistently held the largest share of foreign direct investment in the country. Throughout this eleven-month timeline, Chinese net investments reached 819 million dollars, reinforcing its prominent role in the local economic landscape. Hong Kong secured the second-highest position with a net cumulative direct investment of 308.4 million dollars, while the United Kingdom stepped up as the third major contributor by registering a net capital injection of 224.6 million dollars into various national commercial sectors.
Despite these individual contributions, the broader economic data indicates a notable retraction in overall foreign capital inflows over the past year. The cumulative foreign direct investment for the entire eleven-month period of the fiscal year 2025-26 stood at 1.62 billion dollars, which translates precisely to 1,623.3 million dollars. This total marks a substantial contraction of 28.40% on a year-on-year basis when placed in direct comparison with the 2.27 billion dollars, or 2,267.3 million dollars, that entered the country during the exact same eleven-month period of the preceding fiscal year.
A closer inspection of the country-specific proportions shows that China commanded a major stake of 50.45% of the total direct investments that arrived in Pakistan during the first eleven months of the fiscal year 2025-26. However, echoing the wider global and regional economic slowdown, the direct inflows originating from China experienced a year-on-year contraction of 29.12%, dropping down from the higher baseline of 1.16 billion dollars, or 1,155.4 million dollars, recorded in the corresponding months of the previous fiscal year. Similarly, Hong Kong’s total share of the net capital inflows hovered at 19.00% for the period, which reflects a year-on-year reduction of 28.08% against the 428.8 million dollars documented during the same timeframe last year.
In contrast to the downward trends observed from traditional economic partners, the United Kingdom demonstrated an aggressive upward trajectory in its investment footprint within Pakistan. Holding an overall share of 13.84% during the current eleven-month reporting cycle, the British direct investment of 224.6 million dollars expanded exponentially by 268.80% on a year-on-year scale when compared against the modest 60.9 million dollars registered throughout the same period in the previous fiscal year.
Shifting the focus toward capital markets, the Foreign Portfolio Investment, which measures inbound equity market engagements through both direct and indirect transactional channels, logged a healthy positive balance of 231.7 million dollars for the month of May alone. Within this specific segment, Luxembourg stood out as the most dominant portfolio investor during the monthly window, channeling 3.4 million dollars into the domestic equity markets.
Cumulatively, when combining all forms of public and private capital channels, the grand total for inbound foreign investments during the review month of May settled at 445.9 million dollars. On a broader scale, the total aggregated foreign investment recorded for the first eleven months of the current fiscal year reached 477.6 million dollars, representing a severe decline from the 1.56 billion dollars, or 1,562.3 million dollars, that entered the state coffers during the corresponding months of the previous financial year.
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