Islamabad: Foreign direct investment (FDI) in Pakistan increased sharply on a month-on-month basis in July 2026, reaching $179 million, according to data released by the State Bank of Pakistan (SBP).
The figure represents a 264% increase from June, marking the first month of the fiscal year 2026-27. However, despite the significant monthly growth, July’s FDI remained 20% lower year-on-year compared with the $223.6 million recorded in July 2025.
Power and Financial Services Lead Inflows
The power sector and financial services sector attracted the largest portions of foreign investment during July.
According to data cited by Topline Securities, the power sector received $57.5 million in FDI during the month. This was lower than the $86.8 million recorded in June and the $70.8 million received in July 2025.
The financial services sector attracted $62.3 million, compared with $87 million in June. However, the sector’s July inflows were higher than the $58.8 million recorded during the same month last year.
China and Canada Among Leading Sources
China and Canada emerged as the leading sources of foreign investment in Pakistan during July, according to Topline Securities.
The inflows come as Pakistan continues efforts to attract foreign capital, strengthen investor confidence, and support investment across key sectors of the economy.
Monthly Increase Partly Linked to June Outflows
Topline Securities noted that the substantial month-on-month increase should also be viewed in the context of unusual movements recorded in June.
Outflows from certain electronics and food-sector investments during June contributed to the comparatively low base, making the July increase appear particularly sharp.
As a result, the month-on-month growth does not necessarily indicate that investment momentum has increased by the same proportion on a broader trend basis.
Foreign Companies Continue to Reinvest
The Overseas Investors Chamber of Commerce and Industry (OICCI) said foreign companies operating in Pakistan have continued to reinvest and expand their operations despite challenging economic conditions.
According to the OICCI, foreign companies have invested more than $23 billion in Pakistan over the past decade, highlighting the continued role of international businesses in the country’s economy.
FDI Remains an Important Economic Indicator
The July figures present a mixed picture for Pakistan’s foreign investment landscape. While the 264% monthly increase reflects a strong rebound from June, the 20% year-on-year decline indicates that overall inflows remain below the level recorded a year earlier.
With the government seeking to attract additional foreign capital, future FDI performance will depend on factors including economic stability, investor confidence, policy consistency, and opportunities across key sectors.
The continued reinvestment by existing foreign companies could also play an important role in sustaining investment activity and supporting Pakistan’s broader economic growth.
