Foreign Investment Numbers in Pakistan Crash After 83% Drop in Profit Repatriation

Dollar outflows and the deteriorating state of the economy have made Pakistan one of the least desired moneymaking markets for foreign investors, with the repatriation of profits on foreign investments falling by 83.41 percent year on year (YoY) in July-November of the current fiscal year 2022-23. According to data released by the State Bank of Pakistan (SBP), paid profits from foreign investments in the country fell to $128.7 million in the first five months of FY23, down from $776 million reported in the corresponding fiscal year, primarily in the real estate sector. Foreign Direct Investments (FDI) declined by 85.21 percent to $102 million during the period in review, compared to $693.8 million in FY22. The central bank data further showed that outflows against foreign portfolio investments (FPI) slid massively by 68.08 percent from $82.1 million in FY22 to $26.2 million this year. US investors earned $21.1 million during the period, compared to $125.8 million in the same period the previous fiscal year, while entities and individual investors hailing from the UAE made $10 million in profit repatriation, a decrease of 68.35 percent YoY from $31.6 million in 5MFY22. Chinese investors repatriated $17 million from Pakistan during 5MFY23, indicating a 72.5 percent drop from $61.8 million reported in the same period last year. Investment inflows have lately been hampered by a mixture of international and domestic economic and political bottlenecks. Market players aren’t sure when business would return to normal levels as various sectors of the economy, including the equity market and debt securities, are projected to struggle with the country still trying to get out of today’s money crunch.