Foreign firms repatriate $678.6mln in July-Oct

KARACHI: Repatriation of profits and dividends on investment in Pakistan by the foreign firms increased 23.8 percent to $678.6 million in the first four months of this fiscal year owing to improved profitability and eased rules, central bank numbers showed on Monday.

The repatriated earnings stood at $548.1 million in the corresponding period of the last year. However, the repatriation in October fell to $101.9 million, compared with $169.2 million sent by the multinational companies to their headquarters overseas in the same period of the last fiscal year.

Data issued by the State Bank of Pakistan (SBP further revealed that foreign companies repatriated $648.2 million worth of profit against the foreign direct investments in various businesses in July-October FY2021. That compared with $499.3 million in the corresponding period last year.

Moreover, they sent profits worth $30.5 million against investments in shares at the local bourse. These earnings stood at $48.9 million a year earlier. Food sector remained on the top, repatriating an amount of $161.4 million to overseas in July-October FY2021, while the outflows were $44 million a year ago.

Profit outflows from the communications sector increased to $118.7 million from $6.2 million. Financial businesses repatriated $91 million in the first four months of FY2021, compared with $112.1 million in the same period of FY2020.

The SBP figures showed that $275.4 million was repatriated to the United Kingdom in the period under review, followed by the United States ($109.2 million) and Malta (91.7 million). Analysts said the improvement in the economic activity, better corporate profitability and relaxation in conditions for profit repatriation contributed to this increase.

The foreign investor’s confidence in Pakistan's economy is restoring. The momentum in the economy has gained traction on the back of the government and the SBP stimulus. Furthermore, country’ gross domestic product (GDP) growth is expected to hover around 2.0-2.5 percent in FY2021.

The expected resumption in the International Monetary Fund’s loan programme may also bode well for investor confidence in the economy in the days to come.