Profit, dividend repatriation rises to $807m in July-October

By Our Correspondent
November 27, 2024
Packs of freshly printed US dollar notes are processed for bundling and packaging at the US Treasurys Bureau of Engraving and Printing in Washington. — AFP/File
Packs of freshly printed US dollar notes are processed for bundling and packaging at the US Treasury's Bureau of Engraving and Printing in Washington. — AFP/File

KARACHI: The repatriation of profits and dividends from foreign investments in Pakistan increased by 66.26 per cent to $807.2 million in the first four months of this fiscal year, the central bank data showed on Tuesday.

Multinational firms and foreign investors who participated in the local stock market sent $413.8 million to their home countries in October, compared with $18.7 million a month earlier.

Since the start of the fiscal year 2025, foreign companies operating in Pakistan have been sending home a significant amount of their repatriated revenues due to the ongoing improvement in the nation’s external account.

Pakistan’s foreign exchange reserves held by the central bank rose by $29 million to $11.29 billion as of November 15.The current account balance recorded a surplus for the third consecutive month in October. Pakistan posted a current account surplus of $349 million in October, bringing the cumulative surplus from July to October to $218 million.

Analysts say that although the figures seem higher on an annual basis, they actually show normalised repatriation because the government stopped repatriating profits for several months last year in order to manage external liabilities. Normalised repatriation implies that the government is permitting foreign companies to move their profits overseas.

Data from the SBP shows that the amount of profit repatriation from foreign direct investment increased from $456.2 million in July-October of last year to $772.5 million in July-October of FY25. Profits and dividends from investments were paid out in July-October totalled $34.7 million, compared with $29.2 million a year earlier.

In July-October FY25, the food sector saw the biggest outflow of profits and dividends, with $186 million, up from $68.4 million last year. After $115.5 million in repatriations, the power sector came in second, while the financial businesses came in third with $94.4 million in outflows in the first four months of the current fiscal year.