Foreign investors repatriate over USD 2 billion in profits from Pakistan in FY26

Pakistan saw foreign investors repatriate more than USD 2 billion in profits and dividends during the first 10 months of fiscal year 2025-26, with the banking and power sectors accounting for the largest outflows, according to data released by the State Bank of Pakistan on Monday.

The central bank’s data showed profit and dividend repatriation rose 8.69% to USD 2 billion during July-April FY26, compared with USD 1.84 billion in the same period of the previous fiscal year, underscoring continued pressure on Pakistan’s external account despite improving macroeconomic indicators and relative currency stability.

Outflows linked to foreign direct investment increased 9.71% to USD 1.92 billion from USD 1.75 billion a year earlier, indicating multinational companies continued transferring earnings to parent entities abroad. In contrast, repatriation related to portfolio investment declined 9% to USD 81 million, suggesting relatively lower withdrawals from equity market investments.

Country-wise, investors from the United Kingdom recorded the highest profit repatriation at USD 556 million during the period, followed by China with USD 440 million, the Netherlands with USD 175 million and the United States with USD 169 million.

A sector-wise breakdown showed the banking sector remained the largest contributor to profit outflows, with repatriation totaling USD 477 million.

The power sector followed with USD 433 million, while the food sector accounted for USD 172 million and the communication sector USD 148 million.

Economists said the increase in profit repatriation reflected the gradual normalization of foreign exchange payments after restrictions imposed during Pakistan’s balance-of-payments crisis in previous years.

One financial analyst said the rise in outflows signaled multinational firms were regaining confidence in their ability to move earnings out of the country after delays caused by foreign exchange shortages.

“Higher profit repatriation generally indicates improved liquidity conditions in the foreign exchange market and easing restrictions on external payments,” he said. “However, it also puts pressure on the current account at a time when Pakistan is still relying on disciplined external account management.”

Analysts said that while profit repatriation increases foreign exchange outflows, it can also support investor sentiment by assuring foreign companies they can freely transfer dividends and earnings.

One leading economist said sustained repatriation by foreign investors reflected the maturity and profitability of long-term investments in sectors such as banking and energy.

“Pakistan needs to maintain a balance between facilitating foreign investors and protecting external sector stability,” he said. “Consistent inflows of fresh foreign direct investment will be important to offset these outflows in the coming months.”

Pakistan has been seeking to attract foreign investment under an economic stabilization program supported by the International Monetary Fund while maintaining tighter controls on imports and external financing requirements to manage pressure on foreign exchange reserves.