Profit repatriation surges as foreign firms pull $1.68B from Pakistan

Foreign investors operating in Pakistan repatriated $1.68 billion in profits and dividends during the first seven months of fiscal year 2025-26, marking a 26% increase from a year earlier, according to data released Thursday by the State Bank of Pakistan.

The outflows, recorded between July and January, were up from $1.33 billion in the same period of the previous fiscal year, reflecting higher profit repatriation amid ongoing macroeconomic pressures.

Repatriation against foreign direct investment rose 28.6% to $1.62 billion, compared with $1.26 billion a year earlier, the central bank said. In contrast, outflows linked to foreign portfolio investment fell 6.4% to $60 million from $64.1 million.

Country-wise data showed that investors from the United Kingdom repatriated the largest amount — $443 million — during the period under review. Chinese investors followed with $413 million, while investors from the Netherlands withdrew $151 million.

Economists said the increase in profit repatriation underscores lingering structural challenges in attracting and retaining long-term foreign capital.

“The rise in outflows suggests that while companies are generating returns, confidence about reinvestment remains cautious,” said an analyst. “Policy consistency and macroeconomic stability are critical if Pakistan wants to convert foreign presence into sustained capital formation rather than periodic profit withdrawals.”

Analysts noted that elevated financing costs, currency volatility and tight external financing conditions have influenced corporate decisions about reinvestment and dividend payouts.

Government officials, however, say measures are underway to improve the investment climate and draw fresh inflows, particularly in the energy, manufacturing and information technology sectors. They say these sectors are expected to support sustainable economic growth and strengthen Pakistan’s external account position in the coming years.

Pakistan has been working to stabilize its economy through fiscal consolidation and structural reforms following a prolonged balance-of-payments crisis, with policymakers emphasizing the need to boost exports and foreign investment to ease pressure on external reserves.