Jul-Feb of FY25: 104pc spike in foreign investors’ profit repatriation

KARACHI: The repatriation of profits and dividends from foreign investments in Pakistan witnessed a remarkable 104 percent increase during the first eight months of the current fiscal year (FY25), reflecting improving economic conditions and investor confidence.

According to the State Bank of Pakistan (SBP), foreign investors repatriated $1.55 billion during July-Feb of FY25, compared to $760 million in the same period of FY24, marking a significant rise of $791 million.

Analysts attribute this surge to the ongoing improvement in Pakistan’s external accounts, allowing foreign businesses operating in the country to repatriate their revenues more freely since the start of FY25. They also noted that higher outflows indicate a gradual economic recovery, as companies regain confidence in Pakistan’s financial stability.

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Last year, the government had imposed temporary restrictions on profit repatriation to manage external liabilities and maintain foreign exchange reserves. However, the recent increase suggests that authorities are now allowing foreign companies to transfer their earnings abroad without restrictions, signaling policy normalization and improved forex liquidity.

Repatriation of profits and dividends on Foreign Direct Investment surged by 110 percent to $1.486 billion in July-Feb FY25, up from $705 million in the corresponding period last year.

Outflows from Foreign Portfolio Investment (FPI) was amounted to $65 million during the first eight months of FY25, compared to $55.5 million in the same period of FY24.

On a month-on-month basis, foreign firms transferred $233.3 million abroad in February 2025 as profits and dividends. Of this amount, $232.6 million was related to FDI earnings, while $0.7 million was attributed to FPI returns.

Among the industries, the Food Sector led the outflows, repatriating $291 million, followed by the Power Sector ($233 million) and Financial Businesses ($192 million) during July-Feb FY25.

The sharp rise in repatriation indicates growing confidence among foreign investors and an improving business environment in Pakistan. The easing of restrictions on profit transfers is likely to encourage further foreign investment, reinforcing the country’s economic revival efforts.

Copyright Business Recorder, 2025