Profit repatriation from Pakistan rises massively, stands at $272.5mn in October

Repatriation of profit and dividends by foreign investors clocked in at $272.5 million during October 2023, an exponential growth of over 1964% compared to a meagre $13.2 million repatriated in October last year, showed latest data released by the State Bank of Pakistan (SBP).

“During October 23, the repatriation of profits and dividends in Pakistan reached a 39-month high, surging by 20.7x to $273 million,” said Arif Habib Limited (AHL) in a note.

“The amount is highest since July 2020, when the repatriation of profit by foreign investors was recorded at $355 million,” Tahir Abbas, Head of Research at AHL, told Business Recorder.

According to the SBP, repatriation of profit and dividend from Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) in October 2023, stood at $261.4 million and $11.2 million, showing a YoY increase of 3,049% and 128%, respectively.

During the month, the highest outflow of profit and dividends amounting to $112.3 million was sent from the manufacturing sector.

The transportation and storage sector repatriated $48.4 million in Oct’23, $40.1 million was from wholesale and retail sector/repair of motor vehicles and motorcycles.

July-Sept: profit repatriation from Pakistan rises massively by 266% YoY

Analysts said the surge has been witnessed after the relaxation of capital controls that were implemented previously to curtail the outflow of foreign exchange from the country.

“The rising trend in repatriation amount is expected to continue and is a positive indicator which will improve the investor confidence,” said Abbas.

On a monthly basis, repatriation increased by over 66%, as compared to $163.7 million in September.

In 4MFY24, this figure also saw a significant rise of 581% year-on-year to reach $485 million, as compared to $71.3 million registered in the same period last fiscal year.

During the four-month period, the manufacturing sector saw the highest outflow of profit and dividends clocking in at $154.3 million.

The wholesale and retail sector repatriated $106 million in 4MFY24, $76.9 million was repatriated from the transportation sector.