Islamabad, March 21: The repatriation of profits and dividends from foreign investments in Pakistan has experienced a remarkable surge of 104% during the first eight months of the current fiscal year (FY25), reflecting the improving economic environment and growing investor confidence.
According to the State Bank of Pakistan (SBP), foreign investors repatriated a total of $1.55 billion between July and February of FY25, compared to $760 million during the same period in FY24.
This represents an increase of $791 million, marking a significant year-on-year rise.
Experts attribute this growth to the ongoing improvement in Pakistan’s external accounts, which have allowed foreign businesses to repatriate their earnings more easily since the beginning of FY25.
Analysts also point out that the higher outflows are indicative of a gradual economic recovery, as businesses are regaining trust in the country’s financial stability.
Restrictions Do Not Work
During the previous year, the government had imposed temporary restrictions on profit repatriation to manage external liabilities and maintain foreign exchange reserves.
Read More: FDI Surges in Pakistan, Boosted by Renewable Energy and Digital Sectors
However, the recent upturn in repatriations suggests that the authorities are now allowing foreign companies to transfer their profits abroad without such restrictions, signaling a return to policy normalcy and better liquidity in the foreign exchange market.
Profit Repatriation Killing FDI: Rising Sharply
The repatriation of profits from Foreign Direct Investment (FDI) rose sharply by 110%, reaching $1.486 billion in the first eight months of FY25, compared to $705 million during the same period last year.
Meanwhile, outflows from Foreign Portfolio Investment (FPI) amounted to $65 million during July-Feb FY25, compared to $55.5 million in FY24.
On a month-by-month basis, foreign firms transferred $233.3 million abroad in February 2025 as profits and dividends. Of this total, $232.6 million was linked to FDI earnings, while $0.7 million was related to FPI returns.
Also Read: Monthly FDI Down, Annual FDI Up than Last Year Same Period
Among various sectors, the food industry led the repatriation of profits, with $291 million being transferred, followed by the power sector ($233 million) and financial businesses ($192 million) during July-Feb FY25.
This substantial rise in repatriations highlights an increasing level of confidence among foreign investors and a positive shift in Pakistan’s business climate.
The relaxation of restrictions on profit transfers is expected to further encourage foreign investment, supporting the country’s ongoing efforts to revive its economy.
