In the first seven months of this fiscal year, the repatriation of earnings and dividends by foreign companies working in the country reached the $1 billion mark. On Friday, the State Bank of Pakistan (SBP) announced that the repatriation of foreign investors’ income and dividends continued the upward trend, rising by 8% during July-Jan of FY21 compared to the same duration of FY20 and backed by higher corporate earnings.
Within the first seven months of this fiscal year, international investors repatriated $1.025 billion in profit and dividends, up from $947 million in the same timeframe last fiscal year, a $78 million rise.
According to analysts, strengthened private sector financial earnings have increased the repatriation of income and dividends by international investors over the course of this fiscal year. The recent surge also reflects that foreign investors have won better margins for their investments in Pakistan, despite Covid-19. This would help draw more foreign investment,” they added, in different sectors.
While Foreign Direct Investment (FDI) in the country declined during the period under review, profit and dividend payments due to FDI increased by 14% or $119 million during the period under review.
During July-Jan of FY21, a sum of $961.6 million was repatriated as a return on FDI versus $842 million for the same duration of the last fiscal year. The country earned net FDI worth $ 1.145 billion during the period under review, a decrease of 27%.
Global investors transferred $64 million on account of portfolio investment in July-January of FY21, down from $104 million in the same period last fiscal year, resulting in a 36 percent decrease in profit and dividend repatriation.
According to country-by-country results, UK investors repatriated the most profit and dividends, totalling $362 million. Additionally, with $195 million, the US ranked second.
Sector wise analysis showed that during July-January of FY21, approximately $220 million was sent from food, followed by $136 million from financial industry, $119 million from communication and $106 million from transport services.
In January 2021, a total of $133.3 million in profit and dividends was repatriated month over month. This includes a return of $121.5 million on the FDI and $12 million on the portfolio.