KARACHI: Both domestic and foreign investment are at their lowest levels and could set an unwanted record by falling below a 13 per cent investment-to-GDP ratio during the current fiscal year (FY26), analysts and bankers warn.

Trade and industry have repeatedly urged the government to improve the investment climate by addressing political uncertainty and terrorism.

“How is it possible to invest in a country where uncertainty has a strong grip and is clearly reflected in declining foreign investment?” asked Aamir Aziz, a textile finishing manufacturer and exporter.

He said domestic textile groups have begun investing abroad, citing Interloop and Artistic Milliners as examples. As a result, jobs are effectively being outsourced. For the first time in the country’s recent history, domestic investors are actively securing their investments outside Pakistan.

Experts cite political uncertainty, terrorism as main barriers

A senior banker........

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