KARACHI: The repatriation of profit and dividends declined 33 per cent to $918 million during the first seven months of this fiscal year from $1.343 billion in the corresponding period last year, showed data released by the State Bank of Pakistan (SBP) on Wednesday.
This decline would help government reduce its outflows regarding the foreign payments particularly related to the debt servicing. Pakistan paid $5bn in first half of this fiscal year while the amount could likely reach $10bn by the end of fiscal year.
The highest outflow of profits was noted in oil and gas exploration sector at $118m but it was less than the outflow of $142m in the same period last year. The second highest outflow was noted in the food sector at $82.7m which fell from $137.8m in the same period last year.
The highest fall in profits and dividends was recorded in the telecommunications which fell by 73.5pc to $44m compared to outflow of $166m in the same period of last fiscal year.
Since profits in the banking sector were down during the calendar year 2018, the outflow from the financial businesses also fell drastically. The outflow fell by 39pc to $82.7m compared to $136.8m in the same period last fiscal year.
The power sector witnessed a steep fall in the outflow of profits from the country. The outflow from the power sector was $77.4m compared to $138.4m noting a decline of 44pc.
However, other significant outflows from chemicals and transport equipment noted slight changes during the period under review with profits outflow at $62.4m and $64.3m respectively.
The country has been facing acute shortage of dollar reserves with increasing size of debt servicing. However, the current account deficit fell by 47pc in January giving hope that the country would be able to manage reducing the size of current account deficit which was $18.9bn in FY18.
The State Bank of Pakistan report showed that the outflow from the portfolio investment also fell to $142m compared to $170m in the last fiscal.
Published in Dawn, February 28th, 2019
