KARACHI: The foreign direct investment (FDI) rose eight per cent to $216 million in the first quarter (July-September) of this fiscal year from $200m a year earlier, the State Bank of Pakistan said on Thursday.

However, 88pc ($190m) of these inflows were from China which indicates that Pakistan has yet to appear on the investment map of private investors despite a spike in foreign exchange reserves to $20 billion.

Analysts believe the domination of a single country in FDI inflows could have negative consequences as it would make Pakistan dependent on China.

Another important development was the disinvestment by the United States — the country withdrew about $103m during the first quarter. This heavy withdrawal undermined the other investments like $33m from the United Kingdom, $49m from the United Arab Emirates and $28m from Switzerland during the quarter.

The SBP reported that the overall foreign private investment in July-September fell by 68pc to $116m from $370m in the same quarter of last fiscal year, mainly because of a massive fall in the portfolio investment which plunged to negative $99.7m from $170m a year ago.

The government, which has completed half of its five-year term, has been unable to improve the scenario for investments.

The poor investment climate was also visible at the time of latest Eurobond offer. The government sold $500m Eurobonds last month at a very high rate of 8.25pc, but still failed to attract investors the way it had attracted in the previous offer.

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