The repatriated profits on foreign investments in Pakistan increased by 23 percent to $1,496 million during July 2020-May 2021, from $1,215 million recorded during the same time in the previous fiscal year, data issued by the State Bank of Pakistan (SBP) showed.
This higher outflow of profits and dividends can create pressure on the foreign exchange reserves of Pakistan. However, on the other end, it shows profitable investment opportunities in the country by foreign investors, which may lead to increased investment in the near future.
During the period under concern, the foreign direct investment (FDI) fell by 28 percent, clocking at $1.75 billion during the 11 months of FY2021.
The outflow of profits on foreign portfolio investment was recorded at $114 million from July to May 2021, as compared to $137 million from July to May 2020.
Financial business topped the list of the most profitable sectors for foreign investments with repatriated profits of $281 million, followed by the banking sector with an outflow of $183.3 million in the period under concern.
Food sector outflows were $229 million, as compared to just $58 million the year before. The communication sector repatriated $184.4 million, up from $73 million a year ago, and the tobacco & cigarettes profits outflow was recorded at $120 million against $35 million in the year before.
Oil and gas exploration sector outflows showed a decrease year over year, down $97 million from $215.7 million the year before. Likewise, the transport sector also showed a decline in outflow profits at $130 million compared to $169 million in the previous fiscal year.