Pakistan’s economy is facing fresh pressure as profit and dividend outflows on foreign investments surged to $1.828 billion during July–March FY26, according to data released by the State Bank of Pakistan. This marks an increase from $1.718 billion in the same period last year, reflecting growing repatriation by foreign investors.
The rise in outflows comes at a time when Pakistan is already dealing with external financial stress, including high oil and gas import costs and disruptions in export markets. Despite these challenges, authorities have continued to allow foreign companies to repatriate their profits, signaling a commitment to investor confidence.
Sector-wise, the power sector recorded the highest outflows, reaching $427.5 million, followed by the financial sector at $405 million. Other contributors included the food, telecommunications, and oil and gas sectors, showing a broad distribution of profit repatriation across industries.
On a country basis, the United Kingdom remained the largest recipient, followed closely by China, where outflows nearly doubled compared to last year. Meanwhile, remittances to the United States and the UAE saw a slight decline.
A key concern highlighted in the report is the sharp drop in foreign direct investment (FDI), which fell by 27% during the same period. Analysts believe that ongoing regional tensions and economic uncertainty are discouraging new investment, leaving Pakistan reliant on older investments generating profits that are now being repatriated.
Despite the challenging environment, monthly outflows in March remained steady, suggesting that foreign investors still retain some level of confidence in the market. However, experts warn that without a recovery in fresh investment inflows, continued profit outflows could put additional strain on Pakistan’s foreign exchange reserves.
The latest figures underline the need for economic stability, investor-friendly policies, and improved regional conditions to attract new foreign investment and balance external accounts in the coming months.
