KARACHI: Outflow of profits and dividends from the country fell by 25 per cent, dropping by over $560 million during the first 11 months of the current fiscal FY19. profit
The State Bank of Pakistan on Tuesday reported that the outflow profits during July-May clocked in at $1.673 billion, from $2.237bn in the same period of last year.
The highest repatriation of $256.5 million was in the telecommunications sector, down from last year’s $327.8m in the same period.
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Financial sector posted a decrease in outflow by 10.35pc to $251m during 11MFY19, as against $280m in same period last year. Meanwhile, oil and gas exploration noted an outflow of $216m, declining from $246m.
The profits and dividends from power sector which has been a focus of investment during the last few years, reported an outflow of $129.7m compared to $231.6m in the same period of last fiscal.
Outflow from food sector came out at $177.6m versus $201m while chemicals and transport equipment amounted to $109.5m and $101m, respectively.
However, the repatriation of profits and dividends worth $436m in May was much higher than the 11-month average outflow of $152m per month.
Bankers said the higher outflow in May was due to the end of FY19 as companies pay profits and dividends for the end of fiscal year on Jun 30.
Further details showed that outflow of profits on foreign portfolio investment also declined to $228m, as against $290m in same period of last year.
Financial circle believes that lower outflow could be either a result of low profits or the reinvestment of earnings. However, it is believed that during June, outflow would be higher than May due to end of the FY19.
Apart from friendly countries’ inflows, the balance between inflows and outflows is highly critical. The foreign direct investment during the 11 months dipped by 49pc while remittances increased by 10.4pc in the same period, reflecting the weakness of country’s external account.
Published in Dawn, June 26th, 2019