KARACHI (April 17, 2026) — Foreign Direct Investment (FDI) into Pakistan saw a significant year-on-year jump in March, rising to $167 million compared to $63 million during the same month last year. While the total volume remains modest, the 165% increase is seen as a resilient performance given the intense conflict that has gripped the Middle East over the past 40 days.
Investment Data
- $167 million inflow last month (up from $63 million in March 2025).
- Total FDI for July–March FY26 stands at $1.354 billion, a 27% decline compared to $1.856 billion in the previous fiscal year.
- China and Hong Kong remain the primary sources, contributing over 68% of total inflows for the fiscal year.
- Significant interest noted from Switzerland ($153m), UAE ($144m), and the UK ($88m).
However, country recorded a 27pc plunge in FDI inflows to $1,354m during July-March FY26 compared to $1,856m same period last year.
For more than a decade, country was out of focus for foreign investors, while the internal political/economic uncertainties. https://t.co/9WJCIdCIvj— Asad Ali Toor (@AsadAToor) April 17, 2026
China maintains the lead
China remains Pakistan’s most consistent economic partner, contributing $43 million in March alone, with an additional $35 million arriving from Hong Kong. Together, these two jurisdictions have invested $928 million during the first nine months of the current fiscal year, highlighting the continued importance of the China-Pakistan Economic Corridor (CPEC) and related industrial projects.
Market sentiment and “Risk-Off” behavior
Analysts attribute the overall 27% drop in the nine-month period to global investors reducing exposure to higher-risk emerging markets during the peak of the Gulf war. Komal Mansoor, head of research at Tresmark, noted that while pressure on Pakistan’s Credit Default Swap (CDS) has eased following the recent ceasefire, long-term FDI remains cautious. Investors are reportedly waiting for more clarity on the stability of the Strait of Hormuz before committing to large-scale, long-term projects.
Outlook for FY26
Despite the March surge, financial experts remain cautiously optimistic. The reopening of regional trade routes and the successful return of Pakistan to the Eurobond market are expected to improve the “stable to positive” economic outlook. However, experts suggest that reaching last year’s FDI levels will require sustained regional peace and further narrowing of the trust deficit in South Asian trade.
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