KARACHI:Pakistan’s economy may have steadied, but foreign money is still heading for the exit. That was the message the country’s largest body of multinational investors delivered to the International Monetary Fund on Thursday.
According to a statement issued by the Overseas Investors Chamber of Commerce and Industry (OICCI), net foreign direct investment (FDI) fell by around 32% to $1.7 billion in FY26. This happened even as Pakistan’s external position and sovereign credit profile improved. The Chamber urged the government to use the gains from stabilisation to drive private investment, exports, energy security and structural reform.
The IMF delegation comprised Iva Petrova, Advisor in the Fund’s Middle East and Central Asia Department, and Mahir Binici, the IMF’s Resident Representative in Pakistan. They met senior OICCI leadership and representatives of member multinational companies at the Chamber in Karachi.
The meeting took place as an IMF staff mission led by Petrova began a visit of nearly two weeks for the fourth review of Pakistan’s $7 billion Extended Fund Facility (EFF) and the third review of the $1.4 billion Resilience and Sustainability Facility (RSF), according to reports. Arab News reported that a successful review could release roughly $1 billion under the EFF and about $200 million under the RSF, subject to a staff-level agreement and IMF board approval.
The Chamber said falling FDI was a warning sign despite the improved macro numbers. It called for lower regulatory and compliance burdens, stronger investor protection, and clearer coordination between federal and provincial authorities.
In a notable point, OICCI said domestic industry must lead by reinvesting in Pakistan, because foreign investors take their cues from the confidence shown by local businesses. The Chamber has previously argued that its own members have invested more than the country’s decade-long net FDI.
With oil prices higher because of the Middle East conflict, OICCI called for immediate energy conservation and a medium-term plan for greater self-sufficiency. It sought a coherent energy security strategy covering power, gas and petroleum, citing high regional energy costs, circular debt, the need for investment in refining, and opportunities for regional energy cooperation.
The concerns come as gas-sector circular debt has climbed to Rs3,600 billion and the Gulf crisis threatens LNG cargoes for the coming winter.
OICCI stressed that Pakistan cannot sustain higher growth without expanding its capacity to earn foreign exchange. It called for greater competitiveness and productivity, stronger export-oriented sectors, deeper trade and investment ties with key markets, and more regional trade where commercially viable. Some sectors are already showing what is possible; IT exports alone reached $4.6 billion.
On structural reform, the Chamber urged faster reform of state-owned enterprises and credible privatisation wherever continued state ownership lacks a compelling policy rationale. It also called for separating the state’s roles as policymaker, regulator, facilitator and commercial operator, to leave more space for private investment and competition.
OICCI called for extending taxation into under-taxed segments, including agriculture, real estate, SMEs and retail, instead of repeatedly raising the burden on documented businesses. That is a long-running complaint of the formal sector, even as the FBR expands its point-of-sale network and the Punjab Revenue Authority sets up digital monitoring to curb evasion.
The IMF review is expected to run into the first week of October. The Chamber’s wish-list overlaps heavily with the Fund’s own long-standing reform agenda, especially on SOEs, energy and revenue. What remains to be seen is whether this week’s talks produce commitments that reassure the investors who, by their own numbers, are pulling back.
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