Profit repatriation surges to $1.841bn in July-April FY25

KARACHI: The repatriation of profits and dividends by multinational companies reached $1.841 billion during the first 10 months of the current fiscal year, a significant increase from $882.6 million in the same period last year, according to data released by the central bank on Monday.

This rise in profit repatriation by foreign investors indicates that the State Bank of Pakistan (SBP) continues to allow capital outflows as foreign exchange reserves improve.In April, multinational corporations and foreign investors repatriated $121.5 million, reflecting a 115 per cent increase compared to the previous year. However, this amount represents a 23.1 per cent decline from the previous month.

The foreign exchange reserves held by the SBP stood at $10.4 billion as of May 9. The IMF loan payment increased the SBP’s reserves, but the bank said that the changes would show up in its reserves for the week ending May 16.

Pakistan received the second tranche of $1.02 billion from the International Monetary Fund (IMF) as part of a $7 billion extended fund facility. The current account surplus dropped to $12 million, a staggering 99 per cent decrease from the previous month. Year-on-year, the surplus fell by 96 per cent.

During the 10 months of the fiscal year 2025, the surplus reached $1.88 billion, showing a significant improvement from a deficit of $1.33 billion during the same period last year. According to SBP data, the power sector experienced the highest outflow of profits and dividends in July-April FY25, amounting to $339.8 million, an increase from $120.9 million last year.

The financial businesses ranked second, with repatriations of $288.2 million, followed by the oil and gas exploration sector, which had outflows of $109.3 million during the 10 months of the current fiscal year. Brokerage firm Arif Habib Limited, citing the IMF’s staff report issued last week, said the IMF estimates the current account deficit for FY25 at $0.2 billion (0.1 per cent of GDP), supported by resilient exports and a stronger remittance outlook, thanks to improved macroeconomic and foreign exchange stability. Over the medium term, CAD is expected to widen modestly to about 1.0 per cent of GDP as imports recover. According to the IMF, gross reserves are projected to strengthen, bolstered by committed multilateral and bilateral financing and expected RSF disbursements of $1.3 billion. Access to commercial financing remains limited, with a small Panda bond issuance planned for FY26 and a gradual re-entry into the Eurobond/Global Sukuk market assumed for FY27.