KARACHI: Pakistan has reduced the outflow of profits and dividends, which increased by 112% in the first five months of the current fiscal year (FY25), amid gains in foreign exchange reserves.
According to the State Bank’s most recent data, which was made public on Wednesday, the profits outflow from July to November of FY25 was $1.129 billion, up from $532 million in the same period of the prior fiscal year.
The improvement in the State Bank’s foreign exchange reserves, which have topped $12 billion and are predicted to reach $13 billion by the end of FY25, is what caused the shift.
The IMF took notice of the State Bank’s restrictions on the withdrawal of foreign investment gains in FY24. The Fund criticized this policy and demanded that profits from foreign investments be disbursed. The beginning of the current fiscal year marked the beginning of the relaxation of constraints.
With $247 million, the food industry was the largest outflow.
According to financial experts, the State Bank was able to ease the loss of profits thanks to greater export revenues, larger remittances, and assistance from the World Bank, IMF, and ADB.
November of this year saw a $321 million outflow of profits, a 586 percent rise over the same month the previous year. According to experts, the end of CY24 may result in a larger outflow of earnings in December.
The food industry saw the largest outflow, $247 million, up from $68 million the previous year. This suggests that, in spite of the ongoing boycott effort against a number of restaurant chains and goods, Pakistan’s food industry is doing well.
Compared to the $58 million sent out during the same period last year, the banking sector, which saw record earnings last year, sent out $160 million during the first five months of FY25.
Additionally, compared to the previous year, the electricity sector’s profit outflow increased thrice this year. In the first five months, the power sector gave out $156.6 million in profits, up from $53 million in the same period last year.
$95 million from the tobacco and cigarette industry, $82 million from the petroleum industry, and $70 million from oil and gas development were among the other notable outflows.
