$2.22B in profits and dividends repatriated from Pakistan in FY25

The State Bank of Pakistan (SBP) reported on Monday that foreign investors repatriated $2.22 billion in profits and dividends during the fiscal year 2024-25, marking a marginal increase from $2.215 billion in the previous year.

The data highlights a modest uptick in investor returns, even as the country grapples with persistent dollar shortages and economic pressure.

According to the SBP, the bulk of these outflows came from Foreign Direct Investment (FDI), which accounted for $2.105 billion, slightly higher than the $2.085 billion recorded in FY24. Meanwhile, repatriation through Foreign Portfolio Investment (FPI) dropped to $115 million in FY25, down from $130 million last year.

The manufacturing sector emerged as the top contributor, with foreign companies sending $615 million in profits abroad, up from $523 million in FY24. The energy sector followed, particularly electricity, gas, steam, and air conditioning supply, which saw repatriation surge to $401 million from $248 million a year earlier, reflecting robust returns and renewed investor interest in Pakistan’s power infrastructure.

Conversely, the financial and insurance sector experienced a sharp decline, with repatriation falling to $385 million in FY25 from $638 million in the previous fiscal year.

Economists attribute this drop to the monetary policy, reduced profit margins in the banking sector, and greater regulatory scrutiny.

This report comes at a time when Pakistani rupee has been under some pressure after it remained stable for more than a year because the government was prioritizing essential imports and seeking financial support from the International Monetary Fund (IMF) and other multilateral lenders. In recent years, repatriation of profits has often been delayed or restricted by the central bank to manage foreign exchange reserves more tightly.

Analysts note that the relatively stable repatriation figures despite these pressures reflect a level of sustained investor confidence. "The figures suggest that while capital controls and currency challenges persist, Pakistan remains an attractive market for long-term investors, particularly in manufacturing and energy," said one senior economist based in Karachi.

The SBP governor, in a press conference earlier this year, reiterated the central bank’s commitment to balancing the country’s foreign exchange needs with the rights of foreign investors. “We continue to ensure that investor interests are protected, while maintaining stability in the domestic economy,” he said.