The outflow of profits and dividends on foreign investments plunged by 88 percent during the first quarter (July-Sept) of the current fiscal year (FY23) compared to the same period last year.
According to the State Bank of Pakistan, multinational companies working in different sectors of the country could repatriate only $58.1 million in profits and dividends during the first quarter of FY23 as compared to $478 million during the same period of the last fiscal year.
The decreasing trend in the repatriation of profits and dividends is attributed to lower earnings of foreign firms mainly due to a slowdown in economic activities. However, the decreasing trend in repatriation has eased the burden on the forex reserves of the country.
The international companies repatriated $50.2 million in profits and dividends through Foreign Direct Investment (DFI) and $7.9 million from Foreign Portfolio Investment (FPI) during the first quarter of FY23.
The multinational companies doing business in at least 24 sectors in Pakistan could not repatriate any profits or dividends on investment during the period under review.
The firms which have an investment in the field of food, food packaging, beverage, paper and pulp, leather and leather products, rubber and rubber products, petrochemicals, and petroleum refining were not able to repatriate profits to their homelands. The companies working in the sectors of pharmaceutical and OTC products, cosmetics, cement, ceramics, basic metals, metal products, and machinery other than electrical and electrical machinery also could not repatriate profits.
The international companies with investments in the sectors of busses, trucks, vans and trail, construction, tourism, storage facilities, software development, hardware development, IT services, postal and courier services, and social services, were also not able to repatriate any profits from investments in Pakistan.
The data depicts that the foreign companies working in the mining and quarrying sector in Pakistan repatriated profits and dividends of $17.9 million, the highest outflow of any sector during the first three months of FY23.
The international firms working in the power sector repatriated $15.4 million as profits and dividends on foreign investment during the period under review.
The foreign companies working in the sectors of Tobacco & Cigarettes, sugar, textiles, chemicals, oil and gas explorations, fertilizers, Electronics, Transport Equipment (Automobiles), trade, transport, Communications, Financial Business, and Personal Services have repatriated meager profits and dividends to their countries during the period under review.
Source: Pro Pakistan