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Pakistan’s net foreign direct investment (FDI) jumped 80% year on year to $316 million in August 2026.
The figure marked the country’s highest monthly FDI level in two years, according to Finance Minister Muhammad Aurangzeb’s adviser Khurram Schehzad.
Schehzad said August FDI also rose 77% from July, when net inflows stood at about $179 million.
He described the increase as a positive signal for Pakistan’s economy.
The rise came as Pakistan seeks to move from macroeconomic stability towards investment-led and sustainable growth.
Schehzad said stronger inflows from China, Canada and the United Arab Emirates supported the August increase.
Lower repatriation and outflows also helped improve the net FDI position.
State Bank of Pakistan data showed that the power and financial services sectors attracted the largest FDI inflows during August.
China remained a major source of foreign investment.
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Chinese FDI reached $176 million during July-August, compared with $121 million in the same period last year.
Investment from the UAE also increased to $58 million from $35 million.
Pakistan’s net FDI reached about $495 million during July-August, the first two months of fiscal year 2026-27.
The figure represents a 24% increase from around $399 million during the same period last year.
Gross FDI inflows reached $706 million during the period.
Outflows stood at about $211 million.
The latest figures show stronger investment momentum at the start of the new fiscal year.
However, Pakistan still faces a longer-term challenge in attracting and retaining foreign capital.
Pakistan’s net FDI fell 34% to $1.64 billion in fiscal year 2025-26, according to World Bank data cited in the report.
FDI equalled around 0.39% of GDP during the year.
That remained below the recent average of about 2% of GDP for emerging market and developing economies.
It also stood well below Pakistan’s nearly 5% peak recorded in 2008.
The figures highlight the gap between short-term improvement and Pakistan’s longer-term investment needs.
The stronger FDI figures come as Pakistan continues to face inflationary pressure.
Consumer inflation rose to 11.1% in August, up from 9.2% in July, according to Pakistan Bureau of Statistics data.
The increase pushed inflation further above the State Bank’s medium-term target range of 5% to 7%.
Higher prices remain a key challenge for households and businesses.
The government therefore faces the task of attracting investment while maintaining economic stability.
For policymakers, stronger FDI could support productive capacity, employment and exports if investment flows into productive sectors.
