KARACHI: Pakistan continued paying profits and dividends on foreign investments despite the war in the region, while profit outflows increased by 10.5 per cent in the first eight months of the current fiscal year (FY26).

The government’s performance on the external front has been satisfactory, sending abroad $1.726 billion as profits on foreign investments during July-February FY26, an increase of $164 million or 10.5 per cent.

Financial experts in the currency market noted that the data reflected pre-war transactions. Some believe that part of the amount was also paid during the war, as the data was released on the 20th day of the Gulf war.

Foreign investments have drastically fallen during FY26. The FDI during July-February fell by 33.3pc, or $598 million, to $1.195bn.

Dollar repatriation swells to $1.7bn, foreign investment falls 33pc to $1.19bn in July-February

Sources in the financial sector believe Middle Eastern countries are unlikely to invest due to the war. It is also difficult to predict how long FDI will continue, as the conflict in the region is still escalating.

The highest profit outflow was for the UK, which rose to $444m in 8MFY26, down from $496m in the same period last year.

China recorded the second-highest profit outflow, reaching $433m, up from $140m in the same period last year. China remains the largest foreign investor in the country.

Other significant profit recipients were the US ($160m), the Netherlands ($155m), and the UAE ($120m).

Sector-wise data shows the highest outflow of $422m for the power sector, up from $244m in the same period last fiscal year. The financial sector received $374m, compared to $192m last year.

SBP reserves

The foreign exchange reserves of the State Bank of Pakistan increased by $13m to $16.35bn during the week ending March 13. The reserves remained stable despite the ongoing Middle East crisis, which disrupted regional and global economies.

The country’s total reserves rose to $21.4bn, including $5.35bn held by commercial banks.

Published in Dawn, March 20th, 2026