Pakistan’s power sector emerged as the largest recipient of gross foreign direct investment (FDI) inflows in August 2026, attracting $98.7 million during the month, according to provisional data released by the State Bank of Pakistan. After accounting for outflows of $10.9 million, the sector recorded net FDI of $87.8 million. The latest figure marked a 52.70% month-on-month increase from $57.5 million in July 2026 and a 1.04% year-on-year rise from $86.9 million recorded in August 2025.
The improvement in net investment in the power sector was mainly supported by a substantial decline in outflows. Outflows fell 73.15% month-on-month to $10.9 million in August from $40.6 million in July. Meanwhile, gross inflows remained broadly stable, increasing 0.61% from $98.1 million in July and rising 0.92% year-on-year from $97.8 million recorded in August 2025. The combination of steady inflows and significantly lower outflows resulted in a marked improvement in the sector’s net FDI position.
Within the power sector, hydel power recorded a strong recovery during August. The segment attracted $37.4 million in gross inflows while outflows remained limited to $0.1 million, resulting in net FDI of $37.3 million. This represented a 119.41% month-on-month increase from $17 million in July, when hydel power recorded outflows of $19.8 million. On a year-on-year basis, net hydel investment increased 2.47% from $36.4 million in August 2025.
Coal power also contributed significantly to the sector’s investment performance. The segment received $53.1 million in gross FDI inflows during August and recorded outflows of $9.5 million, leaving net FDI at $43.6 million. Net investment in coal power increased 29.76% month-on-month from $33.6 million in July, while remaining unchanged compared with August 2025.
Thermal power recorded $8.2 million in gross inflows and $1.3 million in outflows, resulting in net FDI of $6.9 million. The figure remained flat on both a month-on-month and year-on-year basis. The performance of the three segments, particularly hydel and coal power, accounted for a substantial portion of the overall net investment recorded in the power sector during August.
Financial Business was the second-largest recipient of FDI during the month, attracting gross inflows of $90.2 million. After outflows of $5.5 million, net FDI in the sector reached $84.7 million. This represented a 35.96% increase from $62.3 million in July and a 54.85% year-on-year increase from $54.7 million in August 2025. The sector therefore recorded growth on both monthly and annual comparisons.
The Trade sector also recorded a notable increase in foreign investment during August. Gross inflows reached $54.8 million, while outflows stood at only $1 million, resulting in net FDI of $53.8 million. Net investment in the sector increased 51.12% month-on-month from $35.6 million and surged 767.74% year-on-year from $6.2 million recorded in August 2025.
Electrical Machinery attracted $12.7 million in gross inflows during August, with negligible outflows, leaving net FDI at approximately $12.6 million. Net investment remained broadly flat compared with July but increased 2.44% year-on-year from $12.3 million in August 2025. The sector was among the other areas contributing to Pakistan’s overall FDI inflows during the month.
At the country level, Pakistan received gross FDI inflows of $401.9 million in August 2026, representing a 32.20% month-on-month increase and a 52.93% year-on-year rise. Total outflows eased to $86.1 million, down 31.34% from July and 1.82% from August 2025. As a result, Pakistan’s total net FDI reached $315.9 million, up 76.88% month-on-month from $178.6 million and 80.41% year-on-year from $175.1 million.
For the first two months of fiscal year 2026-27, covering July and August 2026, cumulative net FDI stood at $494.5 million. Gross inflows during the period amounted to $705.9 million, while total outflows reached $211.5 million. The cumulative net FDI figure was higher than the $398.6 million recorded during the corresponding period of fiscal year 2025-26, reflecting stronger foreign investment during the opening months of the current fiscal year.
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