KARACHI: Repatriation of profits and dividends on foreign investments rose by 86 per cent in the first quarter of the current fiscal year (FY26), reaching $752 million compared to $404.5m in the same period last year, according to data released by the State Bank of Pakistan (SBP) on Tuesday.

The sharp increase marks a shift in policy, as the government has eased restrictions on profit outflows, which were tightly controlled over the past three years. The change is reportedly influenced by the International Monetary Fund (IMF), which has urged Pakistan to liberalise foreign exchange operations.

Despite a $110m current account surplus recorded in September, the broader economic picture remains challenging, with the trade deficit rising to $9bn in the first quarter. The government is also negotiating rollover of large debt repayments due in FY26.

China accounted for the largest share of profit repatriation, receiving $205.6m in Q1, up from $34.3m in the same period last year. However, Chinese investment declined sharply to $188m from $502.6m, reflecting reduced foreign direct investment (FDI) inflows from Beijing.

China tops profit outflows despite drop in investment

Profit outflows to the UK totalled $162.2m, up slightly from $145.3m, while the United States received $68m compared to $56m. The Netherlands experienced a significant increase, receiving $92.3m compared to $6.7 million in the same period last year.

By sector, the power sector led repatriation with $186m, up from $50m, followed by the financial sector — mainly banks — at $182m, compared to $88m last year. The telecommunications sector repatriated $68m, up from $7.5m, while the food sector accounted for $62m, up from $42m.

With SBP reserves at $14.4bn and improved ties with the IMF, analysts expect continued relaxation in profit repatriation policies for the remainder of FY26.

Published in Dawn, October 22nd, 2025