China has maintained its position as Pakistan’s largest foreign investor during the first quarter of Fiscal Year 2026 (July–September), with net Foreign Direct Investment (FDI) inflows of $188.6 million, accounting for 33.15% of the country’s total FDI of $568.8 million, according to data released by the State Bank of Pakistan (SBP).
Hong Kong followed with $96 million, while Switzerland ($55.2m), the United Kingdom ($53.9m), and the UAE ($50.1m) were also among the top contributors.
Despite China’s continued dominance, its investment dropped by 62.5% year-on-year (YoY) compared to $502.6 million in the same period last year. Similarly, Hong Kong’s contribution fell by 33.7% YoY, while Switzerland’s investment increased by 56.4%, indicating shifting investor patterns.
In September 2025, China again led monthly inflows with $68.2 million, followed by Hong Kong at $35.9 million and the UK at $30 million, bringing total FDI for the month to $185.6 million.
Sector-wise, electricity, gas, steam, and air conditioning supply attracted the highest investment of $255.2 million, reflecting sustained Chinese interest under the China-Pakistan Economic Corridor (CPEC) energy projects. The manufacturing sector received $84.5 million, followed by construction ($39m) and wholesale and retail trade ($11.5m).
Meanwhile, Foreign Portfolio Investment (FPI) recorded a net divestment of $633.3 million in Q1 FY2026, contrasting sharply with a $132.4 million inflow during the same period last year. Luxembourg emerged as the leading portfolio investor, contributing $9.3 million during the quarter.
Overall, Pakistan’s total foreign investment in Q1 FY2026 stood at $64.5 million, significantly lower than $997 million in the corresponding period of FY2025, reflecting a global slowdown in capital inflows and cautious investor sentiment.
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