Profit Repatriation by Foreign Investors Nosedives by 80% in FY23

Foreign investors and multinational companies faced a tough year in Pakistan once again with their repatriation of profits decreasing sharply by 80 percent in the outgoing financial year. According to the State Bank of Pakistan (SBP), the profit sent back to their headquarters by foreign investors shrank to $331 million in FY23 as compared to $1.68 billion reported in FY22. The situation of the business has been grim in the financial year 20233-23 due to instability and crisis on the microeconomic front which caused the slowdown in the economic and business activities, closure of plants and factories, and subsequent layoffs of the workforce. The high inflation fueled the cost of operations and businesses, hitting hardly the revenue streams of the multinational companies, resulting in a staggering decrease in profit repatriation. Further, the restriction of sending dividends back home could not be ruled out at the end of the banking regulators and authorities due to the crisis of foreign exchange reserves prevailing through the said period. Investors and companies from Hongkong made the highest repatriation of $84 million in FY23 as compared to $127 million reported in FY22. China stood second with a repatriation value of $83 million reported in FY23 as compared to $144 million registered in FY22. USA-based companies repatriated meager earnings of $38 million in FY23 as compared to $203 million. Investors from the UK repatriated merely $20 million in FY23 as against the handsome value of $350 million registered in FY22.