Karachi: An increase in profit repatriations have been reported again, as foreign entities have sent $2.1b in dividends and profits abroad during financial year 2016-17.
According to statistics released by the State Bank of Pakistan (SBP) on Tuesday, the country’s payments on foreign direct investment (FDI) increased from $1.51b in 2015-16 to $1.73b in FY 2016-17. Foreign investment portfolio (FIP) outflow during FY 2016-17 recorded a fall reaching $376m, although a rise had been seen in overall foreign investment.
Profit repatriations have been on the increase, with the country’s inflow of FDI in 2016-17 almost equaling the outflow of reverse remittances.
In end of April, it had been reported that repatriation of profits and dividends in the first nine months of the current financial year (FY) 2016-17 has risen to $1.33b. This begged the question to the advantages of foreign investment in the country since the outflow of dividends and profits was recorded at $1.3b in that particular quarter.
Back then, experts said that due to increase in the current account deficit in last FY 2016-17, this had negatively impacted the country’s status in the international bond market. This would translate into Pakistan requiring paying a higher interest rate on loans taken from international institutions.
