Foreign firms repatriate $2.109bln in FY17

KARACHI: Repatriation of profits and dividends on foreign investment increased to $2.109 billion during the last fiscal year, up 10.30 percent from a year earlier, the central bank’s data showed on Tuesday.  

Foreign companies repatriated $1.912 billion worth of profits in the previous year.   The surge in corporate earnings aided by an environment conducive to operate business enabled the multinational firms to transfer a decent amount of profits back home during FY17.  

The repatriation of profits by foreign-invested businesses stood at $224.5 million in June 2017.  The State Bank’s data further showed that the capital outflows were lower than the inflow of foreign direct investment in FY17.

The country drew $2.410 billion in FDI during last year. The SBP’s figures revealed that a majority of the profit outflows went to food, chemicals, automobiles, oil and gas explorations, and communications sectors.

However, the repatriation of financial business attracted less repatriated earnings during the period under review.  The food sector saw a massive 104.4 percent increase in repatriated profits, sending $271.3 million home in FY17, compared with $132.7 million a year ago.

The communications businesses sent home $180.8 million against $1779.9 million from the country in FY16. The sent back profits of energy firms were $139.9 million, compared with $135.6 million during the previous year.

Analysts said though a rise in corporate repatriation of the multinationals indicated such firms continued to make significant profits, their level of investment in the country remained lower.  The country is in dire need of attracting more foreign investment to maintain external stability as it has been facing decline in exports and remittances.