Repatriation of profits from Pakistan reaches 6-year high

Around $2.22 billion of profits and dividends were repatriated from Pakistan in fiscal year 2023-2024, a sevenfold increase from FY23.

According to data available on the State Bank of Pakistan’s (SBP) website, the highest amount — $639 million — was repatriated from the financial business sector. This is a significant rise from FY23’s $36 million and an average of $287 million over the past five years.

Repatriation from the power sector also saw a substantial increase, with $246 million repatriated, six times higher than the previous year. Of this, $116 million or 47% was for coal-based power plants, $105 million for thermal power plants, and $25 million for hydel-based power plants.

This increase can be attributed to the SBP’s clearance of the backlog as the central bank had not been issuing approvals after the country’s foreign reserves fell below $3 billion in 2023.

However, following the revival of the International Monetary Fund (IMF) programme, the country’s reserves improved and the central bank started easing import curbs and clearing the backlog.

During FY24, the highest repatriation of profits and dividends went to United Kingdom-based firms, totaling $559 million, which is 28 times more than the previous year. UAE-based firms received the second highest amount, with $274 million repatriated, marking a 19-fold increase from the previous year.

Over the past five years, the average annual repatriation amount has been $55 million.

This surge in repatriation of dividends and profits is expected to restore confidence of foreign investors.