Foreign Investors Sent 6,450% More Profit Out of Pakistan in July 2024

The repatriation of profits and dividends from foreign investments in Pakistan skyrocketed to $139 million in the first month of the current fiscal year, marking a 64.5-fold increase compared to just $2.2 million in July 2023, according to data released by the State Bank of Pakistan. However, there was a notable 66.4% decrease in month-on-month outflows of profits and dividends in July this year. In the previous month, multinational companies and foreign investors in the local stock market had sent $415 million back to their home countries. The profit repatriation on foreign direct investment surged to $133.9 million in July FY25, up from $1.5 million during the same period last year. Additionally, $5.3 million in profits and dividends from portfolio investments were paid out in July this year, compared to $0.6 million during the same period last year. Interestingly, the outflow of repatriated profits and dividends exceeded the foreign direct investment (FDI) inflows totaling $136 million in July. The power sector experienced the largest outflow of profits and dividends, reaching $29.5 million in July, a 103-fold increase from the previous year, according to SBP data. The transport sector followed with $21.2 million in repatriations, and the financial sector came in third with $16.1 million in outflows during the first month of the current fiscal year. In July FY2025, Pakistan saw a reduction in its current account deficit due to an increase in remittances and an improvement in the balance of primary income. The deficit fell to $162 million, marking a 78% decrease from the previous year and a 48% decrease from the last month.