Profit repatriation surges 39 percent to $1.14 billion as outflow curbs ease

By Staff Reporter

ISLAMABAD: Foreign investors sent home sharply higher dividends and profits in the first four months of FY26, led by a jump in transfers to China, even as fresh direct investment in the country continued to shrink.

Foreign investors repatriated $1.137 billion in profits and dividends in the first four months of the current fiscal year, a 39 percent increase from $818 million in the same period a year earlier, according to data released by the State Bank of Pakistan on Wednesday.

The outflow in July-October FY26 was $319 million higher than the $818 million recorded in the corresponding period of FY25, reflecting a continued easing of capital controls that had been tightened during the acute dollar shortage of FY24.October alone accounted for $386 million, 34 percent of the four-month total, with China receiving the largest slice at $167 million and the UK taking $96 million.

China was by far the biggest overall beneficiary over the four months, receiving $372 million, more than four times the $84 million it repatriated in July-October FY25. The Netherlands saw outflows rise to $114 million from $21 million, while the UAE received $95 million against $62 million a year earlier. In contrast, repatriation to the UK fell to $258 million from $292 million and transfers to the US dropped to $77 million from $129 million.

Sector breakdown showed the power sector dominating outflows at $342 million, almost triple the $128 million sent abroad in the same period last year. Financial services (banking and insurance) followed with $229 million, up from $95 million. Manufacturing repatriation declined to $217 million from $306 million, while wholesale and retail trade outflows edged up to $140 million from $133 million.

The rise in profit repatriation comes after the central bank gradually relaxed restrictions that had been imposed in FY24 to preserve scarce foreign-exchange reserves. Those curbs were eased further in FY25 and have remained largely open in the current fiscal year.

Despite the higher outflows, analysts noted that foreign direct investment has not recovered. Net FDI fell 26 percent in the first four months of FY26, underscoring persistent concerns over policy predictability and macroeconomic stability.

Analysts said the increased repatriation has not materially pressured the State Bank’s foreign-exchange reserves or destabilised the rupee, as the outflows were met from dollar buying from open market and official inflows.