KARACHI: Pakistan’s net foreign direct investment (FDI) surged 80 percent year on year to $316 million in August, the country’s finance adviser said on Sunday, describing it as a “positive signal” as Islamabad moves from macroeconomic stability toward investment-led, sustainable growth.

After years of economic turmoil, Pakistan has been treading a long path to economic recovery under a $7 billion International Monetary Fund (IMF) program and is seeking to boost foreign investment to support sustainable growth, improve external financing position and expedite industrial activity.

In a post on X, Khurram Schehzad, an adviser to Finance Minister Muhammad Aurangzeb, said the $316 million foreign investment inflows was the highest monthly level achieved by the country in the last two years, while it reflected a 77 percent increase on a month-on-month basis.

“The increase was supported by stronger investment inflows from China, Canada and the UAE, alongside lower repatriation and outflows, resulting in a significantly stronger net FDI position during the month,” he said.

However, former investment minister Muhammad Azfar Ahsan last month said the country needed to look beyond how much foreign direct investment (FDI) it attracted and focus on whether that capital translates into jobs, productivity and lasting economic value.

“FDI remains an indispensable measure of capital entry, but capital entering an economy is only the beginning of the investment story,” Ahsan told Arab News in an interview.

“The more important question is what happens after that capital arrives and how effectively an economy converts it into lasting economic value and productive capability.”

In Fiscal Year 2025-26 that ended in June, Pakistan’s net FDI fell 34 percent to $1.64 billion, equivalent to 0.39 percent of gross domestic product, according to World Bank data. This was well below the recent Emerging Market and Developing Economies average of around 2 percent of GDP, and far below the nearly 5 percent peak recorded in 2008.

For policymakers, according to the former minister, investment promotion should not end when an investor enters the country.

“It is about moving investment, thinking from measuring capital flows alone to understanding how capital creates enduring economic capability,” he said.

Pakistan’s consumer prices rose to 11.1 percent in August from 9.2 percent in July, moving further above the central bank’s medium-term inflation target of 5-7 percent.