ISLAMABAD
China accounted for more than half of Pakistan’s net foreign direct investment (FDI) in fiscal year 2025-26, reaffirming its position as the country’s dominant investment partner despite an overall decline in foreign investment, according to a provisional data released by the State Bank of Pakistan (SBP).
The analysis shows Pakistan attracted net FDI of $1.637 billion during FY 2025-26, down from $2.477 billion in the previous fiscal year. Of the total, China contributed $862 million, representing 52.7% of Pakistan’s net FDI. Chinese gross inflows reached $1.198 billion, while outflows amounted to $336.3 million, China Economic Net (CEN) reported on Sunday.
The figures underscore China’s continued central role in Pakistan’s investment landscape at a time when overall FDI slowed. Chinese investment alone exceeded the combined net inflows from several of Pakistan’s other major foreign investors.
A similar trend emerged in June 2026. Pakistan recorded net FDI of just $13.5 million, as gross inflows of $294.4 million were largely offset by $280.9 million in outflows. China contributed $43 million in net FDI during the month, equivalent to about 318.5% of Pakistan’s monthly net FDI.
The share exceeded 100% because investment inflows from China offset net capital withdrawals from several other countries, significantly reducing Pakistan’s overall monthly net FDI. The SBP data also indicate that Pakistan received gross FDI inflows of $3.568 billion during FY 2025-26, while outflows climbed to $1.931 billion, leaving net FDI at $1.637 billion.
Overall foreign investment, including portfolio investment, declined to $450.6 million as portfolio outflows continued throughout the fiscal year. Sector-wise, the data reveal that foreign investment remained heavily concentrated in a handful of industries.
The power sector attracted $958.3 million in net FDI during FY2025-26, accounting for approximately 58.5% of Pakistan’s total net FDI. The financial business sector ranked second with $805.5 million, followed by communications with $456.1 million and electronics with $66.9 million. Other sectors posting positive inflows included transport equipment ($57.6 million), textiles ($47.7 million), trade ($19 million), and tourism ($18.2 million).
Meanwhile, several sectors experienced net capital outflows, including mining and quarrying (-$116.8 million), food (-$102.1 million), cement (-$96.6 million), and construction (-$39.9 million), suggesting that foreign investor interest remained uneven across Pakistan’s economy despite strong inflows into energy and financial services, CEN added.
