Net foreign investment in Pakistan fell 34.2 percent to $1.37 billion in the first nine months of the 2009/10 fiscal year compared with $2.08 billion in the same period last year,the central bank said on Friday. A worsening security situation,amid worries over a Taliban insurgency in the countrys northwest,coupled with chronic power shortages have put off investors. Out of the total foreign investment,foreign direct investment fell 48.9 percent to $1.55 billion in the July to March period,from $3.04 billion in the year-ago period,the State Bank of Pakistan said. There was a net outflow of $182.6 million of foreign portfolio investment in the nine months,compared with a net outflow of $957.5 million in the same period last fiscal year. Authorities imposed a floor on the Karachi Stock Exchange benchmark index in August 2008 as political uncertainty and economic and security worries drained investor confidence. The floor discouraged new investment and also led to a sharp outflow of funds,as foreign investors sold holdings in off-market trade. The floor was removed in December 2008. The International Monetary Fund (IMF) saved Pakistan from a balance of payments crisis with a $7.6 billion emergency loan package in November 2008. The loan was increased to $11.3 billion on July 31 last year. The IMF is expected to meet next month to approve the fifth tranche of the loan,worth about $1.2 billion.
