KARACHI, April 23: For the first time the repatriation of profit by foreign companies surpassed the inflow of foreign direct investment (FDI) during the first nine months of this financial year.

The State Bank reported on Monday that the outflow of profit and dividend on foreign investment rose to $669.3 million during July-March period of 2011-12, which was 35 per cent higher than the corresponding period of last year.

The report showed the foreign direct investment fell sharply during the nine months of this fiscal year at just $599 million while the outflow as return on investments was $669 million, 12 per cent higher.

The issue could be a serious one for the government depending largely upon its foreign exchange reserves and remittances to meet the external account imbalances. The current account deficit is still at $3 billion.The government has been failed to persuade the IMF to release the stuck-up remaining amount of Stand-by Agreement. However, once again IMF has been reportedly approached for new loans.

The current financial year proved worst for the foreign investment inflows particularly the FDI.

The report shows the FDI fell to just $599 million during this period compared to $1,157 million FDI in the same period last year. The FDI is almost half of what it was last year giving serious situation on external front.

In the total, outflow of profits and dividends, the payment (return) for FDI was $481.6 million while the remaining outflow of $187.7 million was for portfolio investment.

The detail showed that highest return as profits and dividends were given by the petroleum refining that was about $109.8 million.

The thermal power repatriated slightly less amount as profits that were around $108.8 million. Financial business appeared as the third largest payee of $86.8 million as profits that was repatriated outside the country.

The transport was the fourth largest sector that paid $85.8 million as profits. Telecommunication which had been the largest recipient of foreign direct investment few years back paid an amount of $52.2 million as profits or dividend that was sent abroad.Others like beverages paid $40.6 million, food $26.3 million and oil and gas exploration paid $35.7 million as profits.

The total outflow as profits and dividends during the nine months of the previous fiscal year was $493.9 million which means the outflow this year was 35 per cent higher than previous year.

The country may face a crisis on its external front if the inflows remain at this level which has put enormous pressure on the foreign exchange reserves that already lost about $2 billion in its total since the beginning of the current fiscal year.