Foreign investment in Pakistan falls 38 pct in 07/08

KARACHI, July 21 (Reuters) - Net foreign investment inflows to Pakistan fell 38.4 percent to $5.193 billion in fiscal year of 2007/08 (July/June), compared with $8.428 billion a year earlier, the State Bank of Pakistan said on Monday.

Foreign private investment was $5.17 billion, down 25.7 percent from $6.96 billion in the year-ago period, the central bank said.

Out of the total foreign investment inflow, foreign direct investment was worth $5.15 billion, down 0.3 percent from a year earlier.

Foreign portfolio investment, meanwhile, fell to $40.1 million, down 98.8 percent from $3.29 billion from a year earlier.

The country remains dogged by political uncertainty.

A civilian coalition formed a government in late March after an election in February, while President Pervez Musharraf, who came to power as a general in a 1999 coup has taken a lower profile.

There is also concern about the country's economy, with inflation at its highest in three decades, the current account and fiscal deficits are unsustainable, and foreign currency reserves are running very low, with the rupee weakening to all time lows against the dollar. (Reporting by Sahar Ahmed; editing by Simon Cameron-Moore)