KARACHI: Foreign investment into Pakistan strengthened during the opening months of the new fiscal year, with net foreign direct investment rising sharply in August despite continued regional and economic uncertainties.

According to State Bank of Pakistan data, net FDI reached $315.9 million in August, compared with $175 million in the same month last year. This represents an increase of approximately 80.5% year-on-year.

For the first two months of FY2026-27, net FDI stood at $494.5 million, compared with $398.6 million during the corresponding period of the previous fiscal year. 

China remained the leading source of investment. Chinese investors contributed approximately $113 million during August, followed by Canada with $50 million and the United Arab Emirates with $48 million.

During July-August, Chinese investment reached about $176 million, compared with $120.7 million during the same period last year.

The increase in FDI comes as Pakistan continues efforts to strengthen its external account and attract additional foreign capital.

At the same time, the country’s current account deficit narrowed considerably in August to $98 million from $445 million in July. However, higher oil prices and a widening trade gap continue to present challenges for the external sector. 

The latest investment figures therefore provide an important indicator of foreign capital flows while Pakistan continues efforts to improve exports, maintain foreign exchange stability and attract longer-term investment.