Foreign firms repatriate $1.05 billion in July-March

KARACHI: Foreign firms repatriated $1.05 billion of corporate earnings in the first eight months of the current fiscal year, showing an increase of 22.13 percent year-on-year, central bank data said on Monday.
In March 2015, foreign firms sent back $52 million to their parent countries. Repatriation of profits and dividends earned by multinational firms were $823.4 million in the same period of the previous fiscal year.
The inflows of foreign direct investment (FDI) remained lower then the outflows. Between July and March of current fiscal, the country received $710 million of FDI, while repatriation of profits of the foreign investors crossed $1billion mark.
Energy, telecommunications and financial sectors firms sent back major their profits and dividends. Financial businesses have also been showing impressive growth in the foreign earnings for the last few years.
Despite the existence of circular debt of the oil marketing companies, the power sector foreign investor earned good profits.
Economists said increased in the repatriated earnings are healthy sign for the economy. It means that their shares in corporate profitability are going up and they are sending homes pile of cash, they added.
“The impetus for the latest uptick in the repatriated profits of multinationals is so clear; it is a transfer of the reserves by foreign firms to their parent companies/headquarters based in different countries,” said Dr Hafiz Pasha, a senior economist.
However, slow pace of FDI is alarming.
Economist said the country had seen good inflows of foreign direct investment during the period from 2005 to 2010 after then government allowed 100 percent foreign ownership of businesses and unrestricted repatriation of profits to encourage investment in the country.
During that period foreign investors invested in telecom, oil and gas explorations sectors and financial businesses.
Many analysts foresee that inflow of foreign investment in the country to pick up pace as a result of massive Chinese investment worth $46 billion over the next 15 years under China Pakistan Economic Corridor. This mega investment, if followed through upon, would represent a windfall of FDI for Pakistan in long-term, they added.