Foreign profit repatriation falls to $396.4 million in two months

KARACHI: The repatriation of profits and dividends by foreign companies operating in Pakistan has registered a decline to touch $396.4 million during the first two months (July–August) of the current fiscal year, according to the latest data released by the State Bank of Pakistan (SBP) on Tuesday.

The repatriation of profit and dividend fell 2.75 per cent during the first two months of the current fiscal year, compared with $407.6 million in the same period of the last fiscal year.

The repatriation against foreign direct investment (FDI) recorded a decline of 4.83 per cent to $373 million during July–August 2021, compared with $391.7 million in the same period of the last fiscal year.

The fall in repatriation of profits and dividends, despite strong corporate earnings for the period ended June 30, 2021, is the reflection of foreign investors’ confidence in the domestic business climate.

The Overseas Investors Chamber of Commerce and Industry (OICCI), which is the representative body of foreign investors and multinationals operating in Pakistan, recently released a business confidence survey up to July 2021.

The Business Confidence Survey (BCS) in Pakistan now stands at a positive score of 9 per cent, a record improvement of 59 per cent from the previous negative 50 per cent score in Wave 19 Survey conducted in May 2020, the OICCI survey revealed.

A positive BCI was last seen during the Wave 16 conducted in April 2018.

The repatriation under the head of foreign portfolio investment; however, registered a strong growth of 48.43 per cent to $23.6 million, compared with $15.9 million.

The outflows in portfolio investment may be attributed to reclassification of Pakistan in the MSCI.