Profit return by the foreign investors is rapidly decreasing due to slackness in the economy and global economic recession. The repatriation of profit was constantly on surge during the last few years, however, global meltdown has badly hit the profitability of local and foreign companies during the current fiscal year, resultantly the repatriation of profit and divined is on decline.
The central bank on Thursday revealed that repatriation of profit and dividend by the foreign investors has registered a decline of 9.21 percent during the first ten months (July-April) of current fiscal year. With this decline, overall repatriation amount stood at US $673 million during the first ten months of the current fiscal year 2009, as compared to US $735 million during the same period of the last fiscal year, depicting a decrease of US $62 million.
During the same period foreign investors have sent US $520 million on account of return on foreign direct investment (FDI) and some US $152.2 million on account of return on foreign private investment (FPI). While during July-April of current fiscal year overall FDI stood at US $3.205 billion. Only 9 sectors out of some 36 sectors, showed increase in the repatriation of profit, while remaining sectors depicted a downward trend.
Major repatriation was registered from the power sector, where from foreign investors has repatriated US $166 million in July-April of fiscal year 2009 over the repatriation of US $151.3 million in corresponding period of last fiscal year, depicting an increase of 10 percent.
Petroleum refining is second largest sector, where from foreign investors have sent abroad an amount of US $77.3 million during the first tem months of current fiscal year, previously stood at US $55.2 million in same period of last fiscal year.
Repatriation from trade has surged by 134 percent to US $72.2 million from US $30.8 million, while financial business repatriation stood at US $73.4 million with a decline of 23 percent in the first ten months of fiscal year 2009. Leather and leather products, machinery and construction are three leading sectors, where from not a single penny has been sent abroad by foreign investors.
While, repatriation from communication, which was previously the largest sector in repatriation, has declined by 52 percent to US $46 million during the first ten months of current fiscal year. Foreign investors have repatriated some US $66 million from oil, gas and exploration sector, US $24.2 million from chemical and US $24.4 million from the beverage sector.
In addition US $31 million were repatriated from food, US $16.8 million from tobacco & cigarettes, US $1.2 million from textile sector and about US $7.2 million from fertiliser. It may be mentioned here that the government of Pakistan has allowed a 100 percent repatriation of profit to the foreign investors. Therefore, foreign investors were fully enjoying the government policy by transferring their profit since 2004. However, at present it is showing a negative trend due to global economic recession, which has also hit Pakistan.