KARACHI: Repatriation of profits and dividends on foreign investments during the first four months of the current fiscal year (FY26) rose by 39 per cent compared to the same period last year.

The State Bank’s latest data, issued on Wednesday, showed that outflows during July-October FY26 reached $1,137 million, up from $818m last year, an increase of $319m or 39pc.

The outflow in October this year alone was notably high, accounting for 34pc of the four-month total. October’s repatriation stood at $386m, with China ($167m) and the UK ($96m) receiving the largest shares.

Foreign investment inflows, however, remained weak. FDI fell by 26pc during the first four months of FY26. Due to a severe dollar shortage, the government had kept profit repatriation restricted in FY24, easing it gradually in FY25. The new fiscal year appears more open to foreign investors as profit outflows have continued to rise.

China receives highest share at $372m, followed by UK at $258m

China emerged as the largest recipient during the period, receiving $372m, sharply higher than the $84m it received in the same period last year.

Both the UK and the US received lower profits this year compared to last year, though the former still ranked second with $258m (against $292m in FY25). The US received $77m, down from $129m last year. The Netherlands and the UAE received $114m ($21m last year) and $95m ($62m last year), respectively.

Sector-wise data showed the power sector accounting for the highest outflows at $342m during July-October FY26, compared to $128m during the same period last year. Profits repatriated from the finance (banking) and insurance sector amounted to $229m, up from $95m last year.

The manufacturing sector received $217m in the four-month period, compared to $306m last year, while wholesale and retail repatriated $140m against $133m last year.

The SBP data indicated that easing restrictions on profit and dividend outflows benefited only a few countries, with China at the top. However, it was notable that despite the State Bank’s tight controls on dollar outflows in FY25, the UK and the US received higher profits that year than in the current fiscal year.

Analysts said that despite higher profit outflows, FDI has not picked up, reflecting the government’s inability to strengthen foreign investor confidence. They said that the increased outflows did not reduce the State Bank’s foreign exchange reserves or destabilise the exchange rate.

Published in Dawn, November 20th, 2025