Pakistani cement and construction FDI down in FY19-20

The State Bank of Pakistan (SBP) has released foreign direct investment (FDI) data for June 2020 and the FY2019-20. FDI surged by 45 per cent MoM to US$174.8m in June while for the full financial year, FDI soared 88 per cent to US$2.561bn from US$1.362bn in FY18-19. China transferred the highest net FDI of US$843.1m, Norway US$402m and Hong Kong US$190.7m.

However, the increasing FDI trend is yet to reflect in the country's construction and cement sectors, which still lag behind other industries. The cement and construction sectors recorded a 50 per cent drop in net FDI to US$118.8m in the FY19-20, when compared with US$59.4m in FY18-19. Of this total, the cement industry attracted an investment of US$38.7m (-20.4 per cent YoY) and the construction sector US$20.7m (-70.5 per cent YoY), from US$48.6m and US$70.2m, respectively in the year-ago period. In June 2020 alone, both sectors attracted a total net FDI of only US$9.8m.

Pakistan's government recently announced a stimulus for construction sector and expects a considerable long-term investment into the country as no sources of investment would be asked until later this year.