Profit outflows rise to $1.83 billion in 9MFY26 despite FDI decline

Pakistan recorded an increase in profit and dividend outflows on foreign investments during the first nine months of FY2025-26, with total remittances reaching $1.828 billion compared to $1.718 billion in the same period last year, according to the State Bank of Pakistan (SBP).

The $110 million increase came amid a challenging external environment marked by higher energy import costs and regional tensions affecting trade and production.

At the same time, foreign direct investment declined by 27% during the July–March period, indicating limited new inflows even as existing investors continued to repatriate earnings.

Sector-wise, the highest profit outflows were recorded in the power sector, which reached $427.5 million compared to $328 million last year. The financial sector followed, with outflows rising to $405 million from $214 million, reflecting increased earnings from lending activities.

Other sectors contributing to profit repatriation included food at $142 million, down from $291 million last year, telecommunications at $112 million compared to $108 million, and oil and gas at $50.5 million against $109 million.

Country-wise, the United Kingdom remained the largest recipient of profits at $475 million, although lower than $511 million last year. Outflows to China increased to $438.7 million from $221 million, while payments to the United States declined to $163 million from $190.7 million.

Profit remittances to the United Arab Emirates fell to $128 million from $146 million, and to the Netherlands to $158 million from $163 million.

The data indicates that most outflows were linked to returns on past investments rather than new capital inflows, as investor activity remained subdued.

Despite regional tensions, including developments affecting trade routes and energy markets, the central bank continued to allow profit repatriation. In March alone, outflows stood at $102.4 million.

During the period, Pakistan also faced external payment pressures, including $1.4 billion in Eurobond maturities and $3.5 billion payments to the United Arab Emirates in April, while securing $2 billion in inflows from Saudi Arabia and raising $750 million through Eurobonds.

Analysts said the trend reflects continued earnings by existing investors, but weak foreign direct investment remains a concern amid uncertainty in the regional environment.