Foreign company repatriation of dollars fell 87.3 percent in July 2023, mirroring low profits and pro-IMF capital controls to address the US Dollar shortage in Pakistan.
Foreign companies remitted $2.1 million in profits and dividends during the first month of the financial year 2023-24, compared to an outflow of $16.5 million during the same period in FY23, according to data released by the State Bank of Pakistan.
Profit repatriation from foreign direct investment was $1.5 million in July, while dividends and profit from portfolio investments accounted for just $0.6 million. SBP has been struggling to manage the shortfall of foreign currencies even after opening letters of credit (LCs) to liberate imports. The current business environment continues to impede industrial activities, particularly in export-oriented sectors.
The manufacturing sector had the highest payments on total foreign investments, totaling $0.8 million in July, compared to $0.3 million in the same period last year.
Profit outflows from the mining and quarrying sector fell from $9.4 million in the same period last year to $0.6 million in the first month of FY24.
Outflows from the electricity, gas, steam, and air-conditioning sectors totaled $0.3 million in July, compared to $3.7 million in the same period the previous year.
Meanwhile, electronics firms returned $0.4 million in profits to their overseas outlets.
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