ISLAMABAD (May 05 2009): Foreign Direct Investment (FDI) has declined by eight per cent during the first eight months of current fiscal to $3.0421 billion against $3.306 billion in the same period of last year, according to Ministry of Finance\'s "Review of Economic Situation".

The Review of Economic Situation released here on Monday for July-March 2008-09 showed that FDI declined in Chemical and Petro-Chemicals by 15.4 per cent to $72.3 million from $85.5 million during the period under review. The cement sector received 64.9 per cent less FDI during the period under review against the same period of last year. The FDI inflow in cement sector squeezed to hardly $31.3 million this year against $89.1 million a year ago.

Automobile sector received 64.5 million FDI during July-March of current fiscal which is 12.2 per cent less from $73.4 million a year ago while FDI in power sector declined by 5.7 per cent to $140.4 million from $149 million in the same period of last year.

The FDI in communication sector declined by 12.7 per cent and shrank to $806.1 million against $922.2 million a year ago. In financial business, the FDI dwindled by 28.7 per cent during the ongoing year to $672 million against $942.7 million in the same period of last year while in personal service it declined by 3.2 per cent.

According to the economic outlook, Pakistan External Debt and Liabilities (EDL) have risen to $49.7 billion during at the end of March 2009 against $46.3 billion at the end of June 2008.

The EDL recovered in the third quarter and actually fell in absolute as well as relative terms between end-December 2008 and end-March 2009, mainly because of lower than anticipated net disbursements and positive translation impact of appreciation of dollar versus Yen, SDR and Euro. External debt stood at $49.7 billion or 30.7 per cent of the projected GDP for the 2008-09 at the end of March 2009 which is higher than end-June 2008 stock of $46.3 billion or 27.6 per cent of GDP.

It implies that EDL grew both in absolute and relative terms during July-December period but witnessed some correction in the third quarter. Almost all categories of EDL barring Paris Club, Eurobond and military, have witnessed increase; however, highest increase in absolute term was recorded in debt stock owed to the IMF as a result of inflow of $3. 1 billion on account of Stand by Arrangements (SBA) signed with the IMF in end-November 2008. On the liabilities side $500 million are added by Bank of China, the review added.