The State Bank of Pakistan has admitted that during the first month of the current fiscal year (July 2026), there has been a significant decline of 20% in foreign direct investment (FDI) in the country compared to the same period last year.
According to the data released by the central bank, a total of $179 million was invested in July. Although there was a temporary increase of 264% in July compared to June, it shows a significant decline on an annual basis.
Investment of $57.5 million was received during July, which is less than $7.8 million in July last year.
Foreign investment of $62.3 million was received in this sector, which is slightly better than $58.8 million in July 2025.
Foreign investment in Pakistan also declined by 34% to just $1.64 billion in the last fiscal year ending June 30, 2026.
Although the State Bank did not explain the reasons for this decline when releasing the figures, economists and international security analysts say it is due to the failure of the country’s economic and security policies.
Economists say that foreign investors are hesitant to invest in long-term projects due to the lack of independence of the justice system and legal protection in Pakistan.
Armed groups in Balochistan and Khyber Pakhtunkhwa are continuously targeting government development works and foreign investment projects in the mineral sectors.
According to international observers, the Pakistani army seems to be unable to provide complete security to foreign projects, due to which not only new investors are not coming to Pakistan, but old investors are also forced to wrap up their projects.
The biggest impact of this unfortunate situation is on the ongoing mega projects of Chinese and Canadian companies in Balochistan. Investors in Reko Diq and Saindak are extremely concerned about the frequent deadly attacks by Baloch armed groups, financial losses and loss of life and are considering limiting or completely stopping the progress of work on these projects.
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