Multinational companies doing businesses in various sectors of Pakistan have made repatriated $190 million in profits in April during the slowdown in the economic activities due to lockdown in connection with the COVID-19 outbreak.
According to the State Bank of Pakistan (SBP), the profit sent by multinational companies and foreign investors to their headquarters in April was the second-highest during the current financial year after it made nearly $198 million repatriations of dividends in October 2019.
This showed that economic activities were restored partially in different sectors with SOPs by the provincial government, which allowed a few sectors mainly providing essential services to continue its business activities.
On the other hand, the profitability of a few sectors dropped significantly since the strict lockdown caused the suspension of business activities in major sectors.
The repatriation of dividends in high values also caused an outflow of dollars and pressure on foreign exchange reserves. This also reduced the rupee’s strength against US dollar.
In the previous months of March and February 2020, the profit repatriation stood at $30 million and $27 million.
Overall, the total profit repatriation was down by 3.47 percent in the ten months of the current financial year. It stood at $1.19 billion in the current financial year as compared to $1.23 billion reported in the same period of last financial year.
Besides the slowdown in economic activities, the depreciation of rupee against the dollar has contracted the margins.
During the period, the oil and gas exploration and production sector made the highest profit repatriation of $231 million followed by the Financial Business and Transport Sector with $224 million and $166 billion.
The foreign investment inflows in the real sector recorded impressive inflows of $2.2 billion during the same period as per SBP’s data showing over 120 percent growth year-on-year.