Repatriation of profits plunges by 80%
PHOTO: FILE
Foreign investors in Pakistan witnessed an alarming decline of around 80.30% in repatriation of profits and dividends during the fiscal year 2022-2023, according to the latest data released by the central bank. The outflow of profits and dividends plummeted to $331 million from the previous year’s figure of $1.68 billion, leaving investors and analysts deeply concerned.
AHL, Head of Research, Tahir Abbas described the dip in repatriation as unprecedented, with an 80% decline throughout FY2023. The central bank’s data for June 2023 was particularly worrisome, as repatriation fell by a staggering 78% to a mere $18 million compared to the same month in the previous year. Over the entire FY23, the outflow of profits and dividends experienced an even more dramatic 88% decrease, amounting to a meagre $331 million.
Foreign direct investments in various businesses also witnessed an alarming decline. Foreign companies repatriated only $267.5 million worth of profits in FY23, a stark contrast to the $1.52 billion recorded in the preceding year, representing an 84.08% plunge year-on-year.
Payments against portfolio investments saw a notable drop as well, with outflows amounting to $63.5 million in FY23, marking a decline of 59.36% compared to the same period last year.
Industry expert, Arsalan Siddiqui, attributed this massive decline in repatriation to the foreign currency control measures implemented by the government. These measures seemed to have hindered foreign companies’ ability to repatriate dividends, despite healthy payouts by Pakistani companies in local currency.
Published in The Express Tribune, July 27th, 2023.
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