Foreign investors have repatriated approximately $892 million abroad on account of profit and dividend during the first half of this fiscal year (FY21), the latest data by the State Bank of Pakistan (SBP).
This is an increase of $56 million over the same period last year. As the effects of lockdown restrictions slowly dissipate and economic activities improve, the repatriation of profit and dividend by foreign investors is also gradually increasing. From July to December 2020 (first half of FY21), it rose by 7 percent.
The higher outflow of profit and dividends also reflects that Pakistan’s economy is performing well and can produce better margins for foreign investors.
A major chunk of this outflow came from the Foreign Direct Investment (FDI), and cumulatively some 94 percent of the repatriated amount was sent as returns on FDI.
Repatriation on account of FDI posted a 13 percent increase, while repatriation from Foreign Portfolio Investment (FPI) recorded a 44 percent decline during the period under review, as per SBP data.
Return on FDI data showed an increase of $97 million to $840.1 million during the period in concern, as compared to $743.2 million outflows in the corresponding period of last fiscal year.
$52.2 million were repatriated on account of returns on portfolio investment. This is down from $93.1 million in the same period last year.
Most of the repatriation has been made from the food sector, amounting to ($177 million), financial business ($133 million), communication ($119 million), oil and gas ($74million), and Tobacco ($78 million).
Pakistan has allowed a 100 percent transfer of profit and dividend to foreign investors to attract more foreign investment in the country and the latest SBP data shows that foreign investors are taking full advantage of this policy.