The flow of foreign direct investment (FDI) during July-December 2004 increased by 61 percent and reached $445 million as compared to $277 million during the corresponding period last year. The foreign investment inflow during the last six months of the current fiscal year is higher than the FDI over the last year, said a press statement issued here on Monday. The substantial increase in the FDI inflows can be attributed to good governance, improvement in the economic policies and the Pakistan's image abroad.

Major sectors, which attracted notable FDI during the period, are oil and gas ($107.1 million); communications ($60 million); power ($37.4 million); chemicals ($28.1 million); trade ($23.3 million); financial business ($45.5 million); and others ($143.6 million).

USA has taken the lead during this period by investing $118.6 million while UK stood at second position with FDI of $84.8 million.

The share of major investing countries in FDI inflow is as follows: Netherlands (23.8 percent); Japan (23.8 percent); Hong Kong (14.8 percent); UAE (12 percent); other (167.2 percent).

The substantial increase in the inflow of FDI is an indicator that investment climate in Pakistan is improving. A number of queries received in BOI and visit to Pakistan by foreign business delegation has increased manifold.

Recently, a German delegation of M/s Daimler Chrysler and Coastal Group of UAE visited Pakistan and expressed interest to invest $3 billion in hydropower generation and automobile sector.

The METRO Group has decided to establish 3 to 4 outlets/stores in big cities like Lahore and Karachi.

M/s Jeffery International Group of UK, who recently visited Pakistan, is going to start flight operation from Manchester to Islamabad this year.

Copyright Business Recorder, 2005