Significant Increase in Profit Repatriation
Foreign investors have repatriated $807.2 million in profits and dividends from Pakistan during the first four months (July-October) of the fiscal year 2024-25 (FY25), marking a 66% increase compared to $485 million in the same period of the previous fiscal year.
Breakdown of Repatriated Funds
- Foreign Direct Investment (FDI): Returns on FDI surged by 41%, with $772.5 million repatriated during July-October FY25, up from $456 million in the corresponding period of FY24.
- Foreign Portfolio Investment (FPI): Payments on FPI stood at $34.7 million, an increase from $25.2 million in the same period last year.
Sector-Wise Analysis
The food sector led the outflows, with $186 million repatriated, a significant rise from $68.4 million in the previous fiscal year. The power sector followed, with $115.5 million, and the financial businesses sector accounted for $94.4 million in outflows during the first four months of FY25.
Monthly Repatriation Figures
In October 2024 alone, foreign investors repatriated $413 million, including $401.8 million on account of FDI and $12 million as returns on FPI.
Implications for Pakistan’s Economy
The substantial increase in profit repatriation indicates improved profitability for foreign investors operating in Pakistan. However, it also underscores the need for policies that encourage reinvestment of profits within the country to support sustainable economic growth.
Government’s Stance on Profit Repatriation
Pakistan’s investment policies allow foreign investors to repatriate profits, dividends, or any other funds in the currency of the country from which the investment originated. This policy aims to create a favorable investment climate by ensuring the ease of capital movement for foreign investors.
The rise in profit repatriation reflects the confidence of foreign investors in Pakistan’s market. To maintain this confidence, it is essential for the government to continue implementing investor-friendly policies while promoting economic stability and growth.
For more information on the State Bank of Pakistan’s initiatives, you can watch the following video:
