The commercial and business activities by foreign investors and multinational companies have seen a slow down due to the economic situation in the country, which is evident due to a significant decrease of 34% in profit repatriation of companies to their headquarters.
According to State Bank of Pakistan (SBP) statistics, the profit repatriation of different foreign investors and multinational companies has eroded in the third quarter of 2018-19, standing at $1.04 billion as compared to the dividends sent back home in the corresponding period of last financial year which stood at $1.6 billion.
Various companies have been going through a challenging time these days due to slow down in the economy, including the high cost of doing business, declining pattern in customers consumption and depreciation of the local currency against Dollar.
In a rare scene, renowned and big business conglomerate such as Nestle Pakistan recorded a loss. Famous cigarette maker Philip Morris also shut down its manufacturing plant in Pakistan. Advertising tycoon JWT rolled back its operations as well.
UK, USA, and UAE are the headquarters of the different companies which received the highest value of dividends sent by their subsidiaries in Pakistan. These countries received profit repatriation of $222 million, $172 million and $80 million respectively.
In terms of sectors, oil and gas exploration repatriate the highest profit of $167 million. It is followed by the financial sector with profit repatriation of $137 million and the chemical sector with $90 million.
The repatriation of profit by foreign and multinational companies usually records satisfactory growth.
In the last financial year, the profit repatriation registered a handsome increase hence many companies expanded their operations due to the projected high demand for their business in the local market.
However, the unexpected slowdown in the economy caused a temporary decline in the earning of the foreign companies though this may grow again with a gradual pace of their businesses, margins, and profits.