KARACHI: Pakistan witnessed an 11.5% decrease in outbound payments related to the repatriation of profits/dividends earned via foreign investments for the first month of this fiscal year 2026-27, according to a report published by the State Bank of Pakistan (SBP) on Thursday. This represents a significant reduction from the corresponding period in 2025-26. However, when viewed against the entire month, there is a different narrative altogether.
Profit Repatriation Falls: A Year-on-Year Decline
Data released by the State Bank of Pakistan indicates that foreign investors repatriated a total of $261.4 million worth of earnings and dividends relating to FDI and portfolio investments during July 2026, down from $295 million worth of earnings and dividends repatriated in the corresponding period of 2025, translating into a year-on-year fall of $33.6 million.
Though the year-on-year fall indicates a reduction in repatriation flows, repatriation levels still stood much higher than in June 2026, where foreign investors withdrew USD 151 million. Repatriation grew 73%, or USD 110 million, from the prior month’s level. This suggests that despite July’s fall in profits repatriation vis-à-vis last year, the level saw substantial improvement from last month’s lower base.
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According to the available information, most of the repatriated amount can be associated with foreign direct investments. However, looking at the rate of increase or decrease in this regard, the value of foreign direct investment (FDI) repatriation fell by about 14 percent to around $255 million in July 2026 compared to $294.8 million recorded in July 2025, representing a decline of $40 million. The trend in overall July profit repatriations indicates a fall primarily attributed to a drop in FDI-related payments.
July 2026 was the highest repatriated month ever recorded in Pakistan’s energy sector as foreign portfolio investors withdrew $73 million from the country. Financials emerged as the second-largest sector by repatriation, withdrawing $62 million in July. The communications sector came third with a $24 million repatriation amount, while the Tobacco and Cigarettes Industry emerged fourth, recording $14.6 million worth of repatriations.
In July, however, the overall repatriation was lower compared to last year. However, when looking at the repatriation flow according to economic sector, it is evident that repatriation was concentrated in energy and financial services sectors, suggesting that foreign investors still own substantial investments in sectors that can produce substantial profits that can be repatriated by them. As the country manages its external balances going forward, it will become important to track this trend across these specific sectors.