Outflow of profit beats foreign direct investment by 32pc

KARACHI: Profit repatriation exceeded inflows of foreign direct investment (FDI) by 32 per cent in the first 11 months of 2025-26. highlighting the weak appeal of Pakistan’s economy for fresh capital.

This reflects a grim situation: the country has been struggling to keep the current account under control but has failed to attract foreign investment,. profit outflows on previous investments have exceeded inflows.

The State Bank of Pakistan (SBP) data showed that profit. dividend outflows increased to $2.154 billion during the first 11 months of FY26 from $2.105bn a year ago. However, outflow was half a billion dollars more than the FDI in the same period.

The Board of Investment. the Special Investment Facilitation Council have been working to attract foreign investors but so far their efforts are not fruitful. However, the experts have identified that domestic investment is also absent. They said without domestic investments foreign investors would never see the country as an option to invest.

Repatriation hit $2.154bn in 11MFY26, exceeding foreign investment by half a billion dollars

Only a few countries have invested modest amounts. with the exception of China, which has increased its investment in Pakistan more than any other country. In fact, nearly half of FDI comes from China and Hong Kong. Profit repatriation also reflects the same trend,. the largest outflow of $585.6 million went to the UK in 11MFY26, compared with $605m in the same period last year.

China received the second-highest profit outflow at $456.3m, nearly double last year’s $290m.

Other significant outflows included $190m to the Netherlands, $183m to the United States, $137.6m to the UAE,. $100.7m to Switzerland.

The government and State Bank appear to have imposed no restrictions on profit repatriation. After the IMF agreement, the government eased outflows in FY25, and conditions have since improved. This should encourage foreign investors, particularly given the country’s comfortable foreign exchange reserves.

The foreign exchange reserves held by the State Bank of Pakistan rose by $6m to $17.221bn in the week ending June 12.

Total liquid foreign reserves held by the country stood at $22.741bn as of June 12. including $5.52bn held by the commercial banks.

Published in Dawn, June 19th, 2026