13.4pc fall in profit outflow during first 2 months of FY27

Karachi has seen a 13.4% drop in profit outflow from foreign investments during the first two months of FY27 compared to the same period last year. Repatriation of profits and dividends from Pakistan reached $557.6 million in July-August, down from $643.7 million in the same period of the previous fiscal year. Profit repatriation on foreign investments had increased by 3.87% in FY26, totaling $2.3 billion.

Financial experts believe there are no obstacles to profit outflow, as the State Bank's foreign exchange reserves have reached a much higher level, reaching $21.4 billion last week. This was due to an inflow of $3 billion against Eurobonds launched by Pakistan.

Attracting foreign investment has been challenging for every government, as Pakistan can't offer sufficient attractions for investors. In FY26, the country experienced a setback due to the Gulf war, with most of the second half of FY26 under intense fighting in the region. This kept Pakistan out of the radar of foreign investors, resulting in a 34% decline in foreign investment.

In FY26, Pakistan attracted $1.64 billion in FDI, down from $2.48 billion in the same period last year. The decline in profit repatriation now reflects the impact of poor investment in the country. With the Gulf war still ongoing and worsening due to oil supply shortages and regional forces like the Houthis entering the conflict, the negative impact of the Gulf war poses a significant challenge for the government in attracting FDI.

According to State Bank data, the highest profit outflow was to China, which received $161.2 million during the first two months of FY27, less than the $205.6 million in profits repatriated last year. Outflows to the Netherlands increased to $107 million from $86.7 million last year, while those to the United Kingdom fell to $103 million from $147.5 million. The biggest decline, more than 50%, was recorded in profit outflow to the UAE, which fell to $19.2 million from $45 million last year.