Foreign repatriation from Pakistan surges amid better forex reserves

Foreign investors repatriated $1.55 billion from Pakistan during the first eight months of fiscal year 2025, marking a significant 104% increase from $760 million in the same period of FY24.

Analysts attributed the rise to improvements in the country's external accounts, enabling foreign businesses to transfer revenues with greater ease since FY25 began.

Temporary restrictions imposed in 2023 on profit repatriation, aimed at managing external liabilities and safeguarding foreign exchange reserves, were lifted last year. In FY22 $1.68 billion were repatriated, but only $331 million were repatriated in FY23, which surged to $2.215 billion in FY24.

This policy normalization suggests improved foreign exchange liquidity and stability.

The United Arab Emirates topped the list of recipient countries, with $177.8 million in repatriated profits, followed by the United Kingdom at $108 million and China at $76 million.

Foreign Direct Investment (FDI) profits accounted for the majority of the outflows, surging by 110% to $1.486 billion during July-February FY25, compared to $705 million in the previous year. Meanwhile, outflows from Foreign Portfolio Investment (FPI) reached $65 million, up from $55.5 million year-over-year.

In February 2025 alone, foreign firms transferred $233.3 million abroad as profits and dividends, with $232.6 million linked to FDI earnings and $0.7 million to FPI returns.

Among sectors, the food sector led the outflows, sending $291 million overseas, followed by the power sector with $233 million and financial businesses with $192 million.

While foreign direct investment during July-February FY25 rose 41% to $1.618 billion, monthly inflows in February saw a decline of 45%, totaling $94.7 million compared to $172 million in February 2024.