Pakistan foreign investment falls 36 pct in July-Aug

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KARACHI, Sept 15 - Net foreign investment in Pakistan fell 36.2 percent to $412.2 million in the first two months of the 2009/10 fiscal year, beginning July 1, compared with $646.4 million in the same period a year earlier.

Out of total foreign investment, foreign direct investment (FDI) fell 57.4 percent to $351.4 million in July and August from $824.7 million for the same two months last year, data posted on the State Bank of Pakistan's website (www.sbp.prg.pk) showed.

Foreign portfolio investment lows reversed, with a $60.8 inflow in July and August compared with an outflow of 178.3 million in the same period last year.

Pakistani authorities had also imposed a floor on the Karachi Stock Exchange benchmark index in August of last year as political uncertainty, and economic and security worries drained investor confidence.

The International Monetary Fund (IMF) saved Pakistan from a balance of payments crisis with a $7.6-billion emergency loan package in November last year. The loan was increased to $11.3 billion on July 31.

Pakistan's economy is in virtual recession as gross domestic product growth in the 2008/09 fiscal year of 2 percent was barely enough to keep up with population growth.

Security concerns posed by a Taliban insurgency in the country's northwest and chronic power shortages have also put off investors. (Reporting by Sahar Ahmed; Editing by Simon Cameron-Moore)