Violence Puts Brake on Foreign Investment in 2011 – State Bank of Pakistan

KARACHI, Jan. 17: Pakistan received $386.6 million in foreign direct and portfolio investment in the last six months of 2011, a fall of 64 percent from one year earlier, the State Bank of Pakistan (SBP) said on Tuesday.

In the July-December 2010 period, investment totalled $1.06 billion, a statement from State Bank of Pakistan said.

During 2011, violence in Pakistan’s biggest city and commercial hub Karachi, a Taliban insurgency in the country’s northwest and chronic power shortages have put off long-term investors, analysts say.

“A combination of security and economic issues have put off investors from investing in Pakistan,” said Mohammed Sohail, chief executive at Topline Securities Ltd.

Out of the total investment, foreign direct investment fell 37 percent in July-December 2011 to $531.2 million from $839.6 million in the final six months of 2010, the State Bank of Pakistan said.

During the last six months of 2011, there was a net investment outflow of $144.6 million, compared with a net inflow of $221.5 million in July-December 2010, the central bank said.

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