KARACHI: Outflow of profits and dividends from the country during the first half of current fiscal year increased by 10 per cent despite lower outflows from the foreign portfolio investment.
The outflow during July-Dec FY20 was $836 million compared to $759.5m in the same period last fiscal year. However, portfolio investment outflows fell to $93m compared to $130m in the same period last fiscal year.
The government is trying to accumulate maximum foreign currency to improve foreign exchange reserves.
The highest outflow was noted in the manufacturing sector as $216m were remitted from the country as profits on foreign direct investment (FDI) compared to $245.5m last year.
However, outflow from transportation and storage sectors increased to $156m during the six months. Financial and insurance sector also saw an outflow of $124m while the amount from this sector was $60.5m in the same period last fiscal year.
Outflow from mining and quarrying also increased to $111.8m.
In the wake of increasing foreign investment, the total outflows could increase in the second half of current fiscal year as FDI during the first six months of current fiscal year increased by 68pc to $1.34 billion.
FDI inflows during the current fiscal year were highest in the two sectors; communications sector and power sector at $432m and $358m respectively.
However, compared to last fiscal year, the country has relatively higher foreign exchange reserves and the current account deficit has also reduced by more than 50pc reflecting the economy is in better position to pay the profits on FDI and portfolio investment.
SBP reserves up $146m
Foreign exchange reserves of the State Bank of Pakistan (SBP) increased by $146 million to $11.731 billion during the week ending on Jan 17, the central bank said on Thursday.
The liquid foreign exchange reserves of the country rose to $18.271bn while the holdings of the commercial banks were $6.539bn.
The reserves of the country have been increasing since the beginning of current fiscal year.
Published in Dawn, January 24th, 2020