Profit outflows rise to $1.83bn in July-March FY26

KARACHI: Pakistan repatriated a higher amount of profits and dividends on foreign investments during the first nine months of FY26, State Bank of Pakistan (SBP) data released on Monday.

The central bank’s figures showed that profit and dividend outflows reached $1.828 billion in July-March FY26, compared with $1.718bn in the same period a year earlier, marking an increase of $110 million.

The increase came amid a difficult external environment. Pakistan has been facing pressure linked to the Gulf war, with higher imported oil and gas prices feeding inflation. Export markets in the Middle East were temporarily disrupted, while production costs rose because of increased diesel and petroleum prices.

During this period, Pakistan also had to meet sizeable external payments, including $1.4bn in Eurobond maturities and $3.5bn to the UAE in April. Despite these pressures, the SBP continued to permit profit outflows.

The country is seeking to manage its external account with support from Saudi Arabia, from which $2bn has already reached the SBP, and by raising $750 million through Eurobonds on Monday.

Sector-wise outflows

The data showed that the power sector accounted for the largest profit outflow, with $427.5 million sent abroad during the nine-month period, up from $328m in the corresponding period last year.

The financial sector was the second-largest contributor, with outflows rising to $405m from $214m a year earlier. The financial sector has a strong position in Pakistan and earns mainly through lending to the government, with such lending reaching a record high.

Other sectors that generated notable profit outflows included food, which recorded $142m compared to $291m last year, telecommunications at $112m against $108m, and oil and gas at $50.5m compared to $109m in the same period last year.

Country-wise distribution

By country, the United Kingdom remained the largest recipient of profits on foreign investments from Pakistan, receiving $475m during July-March, compared with $511m in the last fiscal year.

Profit outflows to China nearly doubled from the same nine-month period last year, rising to $438.7 million from $221m.

Outflows to the United States and the UAE declined compared to the previous year. The US received $163m against $190.7m last year, while the UAE received $128m compared to $146m. The Netherlands received $158m, slightly lower than $163m in the previous year.

Investment concerns

The figures suggest that most profits and dividends were generated from earlier foreign investments, as fresh foreign direct investment has fallen sharply over the past several years.

FDI declined by 27 per cent during the first nine months of FY26, with only a limited number of countries showing interest in investing in Pakistan. The decline in new investment remains a concern, particularly as experts believe there is little chance of stronger FDI inflows while the regional war situation remains uncertain.

Even in March, despite the war, profit outflows remained significant at $102.4m, a development encouragement for investors.