Profit Repatriation Surges 312% in First 5 Months of FY24

In the first five months of the fiscal year 2024 (FY24), the repatriation of profits and dividends by foreign investors in Pakistan witnessed a remarkable 312 percent growth, reaching $532 million. This substantial increase, reported by the State Bank of Pakistan (SBP), compared to $129 million during the same period in the previous fiscal year (FY23), marking a significant rise of $403 million. Analysts attribute this surge in profit and dividend outflows to a relaxation of capital controls imposed by the SBP in the prior year due to a foreign exchange crisis in the country. These controls were implemented to manage foreign exchange reserves and avoid default, with Pakistan also availing an IMF SBA program to bolster depleting reserves. Detailed data analysis reveals a 377 percent increase in the repatriation of profit and dividends from Foreign Direct Investment (FDI) and a 58 percent increase from Foreign Portfolio Investment (FPI). Return from FDI surged to $491 million during the first five months of FY24, compared to $103 million in the corresponding period of FY23, indicating a $388 million increase. Similarly, the return on FPI rose to $41 million from $26 million. The sector-wise breakdown shows the Petroleum Refining sector leading with repatriation of $78 million, followed by the Food sector at $68.6 million and the Transport sector at $68.4 million. On a month-to-month basis, the investors repatriated $47 million in profits and dividends in November 2023. This included $35.1 million as a return on FDI and $11.7 million as a return on FPI. Analysts suggest that with the gradual improvement of the economy, the upward trend in repatriation amounts is expected to continue in the coming months