KARACHI - The inflow of foreign direct investment into Pakistan has sharply dropped by $173.1 million during the first two months (July-August) of current financial year 2010-11. Pakistan received an amount of $171.4 million from the developed and emerging economies in July-Aug FY11, compared to $344.5 million in the same period of last year. In terms of growth, the FDI fell by 50.2 per cent over the corresponding period of past fiscal year. However, a slump in FDI growth was offset by considerable portfolio inflows, which increased to $95.6 million by registering 57.1 per cent growth during July-Aug FY11 from $60.9 million a year earlier, SBP reported on Monday. According to SBP statistics, net foreign investment went down by 40.1 per cent as the country attracted $267.0 million worth foreign investment during the period under review compared to $405.4 million in the equivalent months of FY10. SBP data further showed that the total foreign private investment inflow with privatisation and without privatisation proceeds turned down to $260.9 million during respective two months of this year from $435.6 million in the same course of FY10, depicting 40.1 per cent negative growth. Experts said the FDI remained under pressure during July-Aug FY11 amid fragile recovery in world economy and consistent fall in the reinvested earnings (equity) of the investors in key economic sectors. Moreover, the effect of global economic slowdown on foreign direct investment in the country was further exacerbated by deteriorating law and order situation and energy crisis. They believe that the growth in FDI and private inflows could further decline in coming months due to widespread damage and losses to national economy caused by heavy floods in certain parts of the country, which has badly hurt the agricultural output and infrastructure in the flood affected areas. It may be mentioned here that during the last three years, more than 70 per cent of FDI was concentrated in three sectors, i.e., communication, foreign, and oil& gas exploration, with the increase in provisioning costs of financial business and stiff competition in communication, foreign direct investment inflows in these two sectors dried up during the reported months of the ongoing fiscal year.