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KARACHI: The repatriation of profit and dividend by foreign investors plunged by 80 percent, ie, to 18 years lowest level of $ 331 million during the last fiscal year (FY23).

The State Bank of Pakistan (SBP) on Wednesday reported that repatriation of profit and dividend by foreign investors declined to $331 million in July-June of FY23 compared to $1.68 billion in the same period of last fiscal year (FY22), showing a decline of 80 percent or $ 1.349 billion.

The repatriated amount in FY23 is the 18-year lowest level. As per available data during FY06 an amount of $ 504 million was repatriated and since then the repatriated amount was increasing and rose to the highest level of $ 2.32 billion in FY18.

FDI plunges 21pc in 11 months

Analysts said the economic slowdown has drastically reduced the earnings of foreign companies operating the country, which resulted in the massive decline in the repatriation of profit and dividend. In addition, some restriction on outflow of foreign exchange also contributed to this decline of repatriation of profit and dividend.

The SBP statistics further revealed that repatriation of profit and dividend from Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) declined by 82 percent and 59 percent respectively.

Foreign investors repatriated $267.5 million as return on FDI during July-June of FY23 compared to $ 1.524 billion in the same period of last fiscal year, depicting a decline of $1.256 million. Similarly, repatriation of profit from FPI also fell from $ 156.2 million to $ 63.5 million in the last fiscal year.

The highest outflow of profit and dividends amounting to $89 million was sent from the Oil and Gas Explorations, $ 46.3 million from Mining & Quarrying, $44 million from power, $44.2 million from the communication sector, and $ 36.2 million from the financial sector.

Month on Month basis, repatriation of profit and dividend in June 2023 was $ 18 million including $ 10.3 million as return on FDI and $ 7.6 million from portfolio investment.

Presently, production of large-scale manufacturing industries including automobiles, textile, food, petroleum oil and other sectors is also on decline as they are facing difficulties in import of raw material and the key policy rate is at the highest level of 22 percent to control the inflation.

Copyright Business Recorder, 2023

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Yasir Jul 27, 2023 07:09pm
Very poor and misleading information. SBP has stopped companies to repatriation of profits. A buffer is being created which will burst whenever foreign investors/companies can freely move their dividend out of country. This information can be checked from balance sheets of these companies.
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