KARACHI: Repatriation of profit and dividend by foreign investors has exceeded the Foreign Direct Investment arrived in July 2020.
Transfer of profit by foreign investors has witnessed a health growth in the first month of this fiscal year (FY21) and overall repatriation of profit and dividend is even much higher than FDI inflows arrived in July 2020.
The State Bank of Pakistan (SBP) on Friday reported that repatriation of profit and dividend by the foreign investors was surged by 156 percent in July 2020. Foreign investors repatriated some $ 354.5 million on account of profit and dividend in the first month of this fiscal year (FY21) compared to $138.2 million in the same period of last fiscal year (FY20), depicting an increase of $216.3 million.
The detailed analysis showed that the repatriation of profit and dividend is also higher than the FDI arrived in the country during this period. Pakistan fetched FDI amounting to $ 114 million in July 2020 as against repatriated amount of $354.5 million in July 2020.
Economists said that the improved earnings of corporate sector and multinational companies resulted in healthy repatriation of profit and dividend by the foreign investors. During the Covid-19, sales of a number of foreign companies increased due to higher demand of essential items like soaps and sanitizers.
The massive repatriation of profit also reflects that despite many challenges Pakistan is still a profitable market for foreign investments, they added.
According to the State Bank, major outflow of profit and dividend was witnessed on account of FDI, which contributed 96 percent share in overall repatriated amount. Foreign investors have sent abroad some $ 340 million on account of return on FDI during the first month of the current fiscal year as compared to $ 127 million in the corresponding period of last fiscal year, showing an increase of 167 percent or $213 million.
Repatriation of profit and dividend on account of foreign portfolio investment (FPI) also registered an increase of 25 percent to $14.3 million in July 2020 up from $ 11.4 million in the same period of last fiscal year.
During the period under review, foreign investors repatriated some $ 179 million to the UK, $53.3 million to US and some $ 47 million were sent to Malta.
Copyright Business Recorder, 2020
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