Profit repatriation from Pakistan rises 104% to $1.55bn

Foreign investors repatriated $1.55 billion from Pakistan in profits and dividends during the first eight months of fiscal year 2025. This is a 104% increase compared to $760 million in the same period last year. The State Bank of Pakistan reported that the rise reflects improved economic conditions and greater investor confidence. Repatriation from Foreign Direct Investment (FDI) rose sharply by 110% to $1.486 billion, up from $705 million last year. Outflows from Foreign Portfolio Investment (FPI) also increased, totaling $65 million, compared to $55.5 million last year. In February 2025 alone, foreign firms transferred $233.3 million abroad. Most of this amount, $232.6 million, was related to FDI earnings, while $0.7 million came from FPI returns. The food sector led the outflows, with $291 million, followed by the power sector at $233 million and financial businesses at $192 million. Analysts believe this increase is due to improvements in Pakistan's external accounts, which give foreign businesses more freedom to transfer their earnings. The data suggests a gradual economic recovery and renewed trust in Pakistan’s financial stability. Last year, the Pakistani government had imposed restrictions on profit repatriation to address external liabilities and stabilize foreign exchange reserves. However, recent data indicates these restrictions have been eased. This change allows foreign companies to transfer funds more freely, signaling improved liquidity in the foreign exchange market.