Repatriation of profits and dividends by foreign investors posted a 12 percent growth during the first month of this fiscal year (FY2017-18). Economists argue that the growth in repatriation of profits and dividends reflects the fact that Pakistan''s economy is gradually improving and foreign investors are getting better margins on their investments. During the last two years, overall productivity has increased, supported by improved law and order situation, energy supplies and a higher demand.
According to the State Bank of Pakistan (SBP), repatriation of profit and dividend by the foreign investors continued to show an upward trend posting a growth of 12.41 percent during the first month of this fiscal year. Foreign investors have repatriated some $16.9 million on account of profit and dividend during July, 2018, the first month of current fiscal year (2017-18) as against $ 145.8 million during the same period of last fiscal year (2016-17), depicting an increase of $18.1 million.
The detailed analysis revealed that major outflow of profit and dividend has been witnessed from the Foreign Direct Investment (FDI) and cumulatively some 86 percent of repatriated amount has been sent as returns on FDI. The higher outflow of profit and dividend from the FDI also indicate that despite some challenges Pakistan is still giving better margin to the foreign investors.
During the period under review, repatriation from FDI has surged by 13 percent. Foreign investors have sent abroad $142 million on account of return on FDI during the first month of the current fiscal year compared to $125.1 million in the corresponding period of last fiscal year, showing an increase of $ 16.8 million. During the period under review, the country fetched FDI amounting to $ 222.6 million.
Repatriation of profit and dividend from portfolio has also surged slightly. With an increase of 6 percent or $ 1.3 million, foreign investors repatriated $ 22 million on account of returns on portfolio investment during July this year as compared to $ 20.7 million in July last year.
Economists said that the improved profitability of the corporate sector would also help attract more foreign direct investment in the country.
It may be mentioned here that capitalizing on the government''s liberal policy; the foreign investors had repatriated some $ 2.019 billion on account of profit and dividend during last fiscal year as compared to $1.912 billion in FY 2015-16, depicting an increase of $197 million.
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