Foreign Profit Repatriation Slips 3% YoY in First Two Months of FY 2022

The repatriation of profits and dividends by foreign investors fell by about 3 percent year-over-year during July and August in FY 2022, according to data released by the State Bank of Pakistan.

The State Bank of Pakistan (SBP) reported that foreign investors repatriated $396 million worth of profit and dividends in the first two months of the current fiscal year.

This showcases a decline of about 3 percent, or $11.2 million, from the $407.6 million repatriated in the same period last year.

Investment through foreign direct investment slipped 5 percent, or $19 million, compared to the same period in the prior year.

Foreign investors sent $372.8 million abroad in July and August this fiscal year, compared to the $391.7 million sent in the corresponding period of the last fiscal year.

Repatriation of profit and dividend based on portfolio investment rose by 48 percent or $7.7 million to $23.6 million.

Meanwhile, foreign investors repatriated $237 million over the past month, including $231.7 million in terms of return on FDI and a total of $5.4 million via foreign portfolio investment.

The decline in repatriation may be attributed to a slowdown in earnings by foreign companies due to the COVID-19 pandemic. It may also be due to a deterioration in foreign investors’ perspective of Pakistan’s business climate viability.

Recently, the federal government introduced a policy allowing for a 100 percent transfer of profit or dividend to boost foreign investment.

Over the past two years, Pakistan has progressed 39 places to secure the 108th position in the ease of doing business world ranking.

However, in September, the index provider MSCI downgraded Pakistan as a frontier market index from an emerging market index.

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