"It is a disappointing situation in the first quarter of the current fiscal year although the government has tried to attract investors from all over the world particularly China and Arab countries," a financial analyst said.
According to figures available with the Karachi Chamber of Commerce, foreign direct investment (FDI) fell by 26 per cent in the second quarter, compared to the same period last year.
"What should worry the government is that compared to neighbouring countries like India, Bangladesh and China, the size of the FDI in Pakistan is negligible," analyst Intikhab Ali said.
Prime Minister Nawaz Sharif, himself a business tycoon, visited many countries to attract investment, but the nation is yet to see positive results of his efforts.
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In the first quarter of the current fiscal year, even the foreign investment from friendly counties, like Saudi Arabia and China, was in the negative. They withdrew USD 3.9 million and USD 14.6 million, respectively, during the quarter.
Most of the investment came from European countries, the US and Hong Kong. The highest amount of USD 43 million was invested by Hong Kong, more than 25 per cent of the total investment of USD 169 million.
However, the size of investment dropped to the lowest level in the last 10 years which is hurting the image of the country in the global market.
Pakistan which is facing pressure of external debt serving also saw the dollar reach just below the level of Rs 103 yesterday at close of the business week.