With a healthy growth of 31 percent, foreign investors repatriated $1.8 billion on account of profit and dividend during July-May of this fiscal year (FY16). Economists said that improved financial results of the corporate sector have scaled up repatriation of profit and dividend by foreign investors. Although presently foreign investors are reluctant to invest in Pakistan due to energy crisis, poor law and order situation, political instability and unsustainable economic policies, the repatriation trend shows that despite these issues, Pakistan's economy is still delivering huge margins on already executed investments, they added.
In addition, a massive increase in the repatriation of profit and dividend reflects that the country's economy is gradually improving and foreign investors are getting better margins on their investments in Pakistan, they added. According to the State Bank of Pakistan, repatriation of profit and dividend by foreign investors is on increase. It posted a healthy growth of 31.5 percent during the first 11 months of the current fiscal year.
Foreign investors repatriated some $1.816 billion on account of profit and dividend during July-May 2016 against $1.381 billion during the same period of last fiscal year (FY15), depicting an increase of $435 million. The detailed analysis revealed that repatriation has posted a major increase from FDI, which is a long-term investment and much better for the country's economy compared to portfolio investment. The higher outflow of profit and dividend also reflect that Pakistan is still an investment friendly market, that can produce better margins for foreign investors, economists said.
Major outflow of profit and dividend has been witnessed from the Foreign Direct Investment (FDI) and cumulatively some 75 percent of the repatriated amount has been sent on account of returns on FDI. During the period under review, repatriation from FDI surged by 29 percent. Foreign investors sent abroad $1.448 billion on account of return on FDI during the 11 months of the current fiscal year compared to $1.119 billion in the corresponding period of last fiscal year, showing an increase of $329 million.
The repatriation of profit and dividend on account of FDI is even higher than overall FDI that attracted Pakistan during the period under review. The country fetched FDI amounting to $1.083 billion during July-May of FY16 against the repatriation of $1.448 billion.
Repatriation of profit and dividend from portfolio investment has also surged slightly. With an increase of $106 million, foreign investors repatriated $368.28 million on account of returns on portfolio investment during July-May of FY16 compared to $262.3 million in the corresponding period of last fiscal year. Economists said the improved profitability of the corporate sector will also help attract more FDI in the country.