Foreign investors: Jul-Nov profit repatriation soars 312pc to $532m YoY

KARACHI: Repatriation of profit and dividends by foreign investors posted a notable 312 percent growth during the first five months of this fiscal year (FY24).

The State Bank of Pakistan (SBP) on Wednesday reported that foreign investors repatriated an amount of $ 532 million during July-Nov of FY24 on account of profit and divided on their investments in the country compared to $ 129 million in the same period of last fiscal year (FY23), depicting an increase of $403 million.

Analysts said that the massive surge in the profit and dividend outflows is attributed to some relaxation on capital controls that were imposed by the SBP last year due to foreign exchange crisis in the country.

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A number of restrictions were imposed to manage the foreign exchange reserves of the country to avoid default. In addition, Pakistan also availed an SBA programme from the IMF to build the depleting foreign exchange reserves of the country.

The detailed analysis of data revealed that repatriation of profit and dividend from Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) rose by 377 percent and 58 percent, respectively.

Repartition of profit and dividend as return from FDI surged to $ 491 million during the first five months of this fiscal year compared to $ 103 million in the same period of last fiscal year, showing an increase of $ 388 million.

Similarly, an amount of $ 41 million was sent abroad as return on FPI during July-Nov of FY24 up from $ 26 million in corresponding period of last fiscal year.

Sector-wise data revealed that the highest outflow of profit and dividends amounting to $78 million was made from the Petroleum Refining sector. Food sector stood second with $68.6 million repatriation in the first five months of this fiscal year. With $ 68.4 million outflows, the transport sector ranked third.

Month on Month basis, the repatriation of profits and dividends by the investors was $ 47 million in November 2023. This included $35.1 million as return on FDI and an amount of $11.7 million as return on FPI.

Analysts said as the economy is gradually improving, it is being expected that the rising trend in repatriation amount is expected to continue in coming months.

Copyright Business Recorder, 2023