Foreigners repatriated $378m profits during July-Feb

ISLAMABAD: Foreign investors repatriated $378 million worth of profits and dividends during July-February 2009-10 they have made on investments in Pakistan. Highest repatriation was recorded in communication followed by power and trade sectors.

According to the State Bank of Pakistan the reverse remittances during the period under review were 26.1 per cent less than $511.6 million recorded in same period of the last year.

During the first eight months of the outgoing fiscal, net foreign investment inflow declined 46 per cent (or $868.3 million) to $1.024 billion from $1.89 billion received in same period last year.

Foreign direct investment (FDI) declined by 52.8 per cent (or $1.475 billion) to $1.319 billion. Last year during same period, its inflow was at $2.794 billion. Private portfolio investment inflow stood at $343.5 million while public sectors withdrew about $638.7 million portfolio investment in the shape of debt securities on net sale/purchase of special US Dollar bonds, Eurobonds, Foreign Exchange Bearer Certificates (FEBC), US Dollar Bearer Certificates, Tbills and Pakistan Investment Bonds.

Highest outflow during July-February 2009-10 was recorded in communication sector with $57 million followed by power sector with $48.1 million, trade sector ($41.1 million), oil and gas exploration ($30.1m,), food sector ($27.4,m), chemical sector ($21m), petroleum refining ($20m), financial businesses ($17.8m), beverages ($15.3 million), tobacco and cigarette ($14.2m), transport ($10.5 million), transport equipments (automobiles) ($10.3 million) and repatriation from personal services stood at $6.7 million.

The reason for declining repatriation of profits was due to reduction in inflow of foreign investment. Independent economists however believe the dwindling outflow looks encouraging for the economy, as there is still a resident threat of burgeoning current account deficit (CAD) as a result of high crude oil price and outstretched expenditures on war against militants in various parts of FATA. It is worth mentioning that for the last couple of years, the economy confronted with the same problem of huge CAD that disturbed financial accounts of the government.