$836 Million withdrawal from Pakistan economy in FY 2019-20

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$836 Million withdrawal from Pakistan economy in FY 2019-20

ISLAMABAD - Foreign and multinational companies in selected sectors continued to book profit in Pakistan despite the prevailing economic challenges. The overall profit repatriation of foreign investors showed an impressive double-digit growth of 10 percent in the first half of the financial year 2019-20.

According to the State Bank of Pakistan (SBP), profit repatriation of foreign and multinational companies surged to $836.3 million in July to December 2019 as compared with $759.5 million recorded in the similar period of last financial year.

Overall, the business climate in the country is witnessing a tough time mainly due to a slowdown in the economy due to high-interest rates, the rising cost of doing business, etc.

However, some of the companies maintained their revenue streams and repatriated handsome profits to their headquarters.

The sectors that recorded growth in profit repatriation include financial business including foreign banks which saw a growth of 37 percent in the said period.

This sector repatriated $155.6 million. The transport sector repatriated a profit of $139.5 million which is over three times higher than the last year. It was followed by oil and gas exploration and production companies which improved their balance sheets due to higher oil prices in the international markets.

The sector made a profit repatriation of $118.8 million from July to December 2019, which is 50 percent higher than the previous year. The chemical sector also recorded a double growth in the profit repatriation in the said period at $85 million.

The stability of Rupee against Dollar played a significant role in the profit repatriation of the companies working under these sectors.

Traditional sectors that recorded profit repatriation during this period included textile, food, beverages, cement, transport equipment, power, construction, communication, tourism, etc.