KARACHI: Repatriation of profits and dividends on foreign investment in Pakistan increased 11.58 percent to $1.464 billion in 10 months of this fiscal year, driven by higher earnings, the central bank data showed on Thursday.
The repatriated amount stood at $1.312 billion in the corresponding period of last year.
Multinational companies repatriated $196.8 million as profits and dividends to their headquarters in April.
The country drew $1.456 billion in foreign direct investment (FDI) in July-April FY2022.
The State Bank of Pakistan’s (SBP) data revealed that profit repatriation on FDI rose to $1.333 billion in July-April FY2022 from $1.214 billion a year ago.
The outflow as payment against portfolio investment stood at $130.7 million, compared with $98 million in July-April FY2021.
Power, oil, and gas exploration and communications contributed to the increase in the profit outflows in 10 months of the current fiscal year.
The outflows from the power sector registered at $187.1 million in July-April FY2022.
These outflows amounted to $55.1 million in July-February FY2020.
The outflows from the tobacco and cigarettes stood at $84.7 million in nine months of FY2021. This sector repatriated $38.8 million a year ago.
Profit outflows from the communications sector increased to $152.1 million from $124 million.
The increase in the repatriation of profits and dividends is attributed to higher earnings of foreign firms and hope for the revival of the IMF loan programme.
The repatriated earnings are increasing and still higher than the foreign direct investment made by the multinational firms in the country.
The decrease in the FDI was because of the completion of the power projects under China Pakistan Economic Corridor (CPEC). Overall, fresh investments have reduced under CPEC.
Besides, the growing uncertainties at the economic and political fronts are the main reasons behind the slowdown in FDI flows.
The ongoing political upheaval and deteriorating economy are hurting global investor confidence. Significant uncertainties about the resumption of the
IMF loan programme and lack of clarity about the shape of future economic policy could hamper FDI in coming months.
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