KARACHI: Profits and dividends on foreign investment in Pakistan witnessed a decline as the outflow fell by 13.4 per cent during the first two months of the current fiscal year (FY27) compared to the same period last year.

During July-August, the repatriation of profits and dividends from Pakistan fell to $557.6 million from $643.7m in the same period of last fiscal year. The repatriation of profits and dividends on foreign investments had increased by 3.87pc in FY26, with the total reaching $2.3 billion.

Financial experts said there was no hurdle to the outflow of profits as the State Bank’s foreign exchange reserves had reached a much higher level. The SBP’s FX reserves reached $21.4bn last week following an inflow of $3bn against the Eurobonds launched by Pakistan.

Attracting foreign investment has been a difficult task for every government as the country could not offer sufficient attractions for investors. FY26 witnessed another setback in the face of the Gulf war. Most of the second half of FY26 remained under intense fighting in the Gulf region, which kept a neighbour like Pakistan out of the radar of foreign investors.

Pakistan recorded a 34pc decline in foreign investment in FY26. The country attracted FDI of $1.64bn in FY26, down from $2.48bn in the same period last year. The decline in profit repatriation now reflects the impact of the poor investment in the country.

Since the war in the Middle East is still continuing, with the situation worsening each day due to shortages of oil supplies on international markets, while regional forces like the Houthis have emerged to enter the war, the negative impact of the Gulf war would remain a difficult challenge for the government in attracting FDI.

State Bank data shows that the highest profit outflow was to China, which received $161.2m during the first two months of FY27.

However, this was less than the $205.6m in profits repatriated last year.

Outflows to the Netherlands increased to $107m from $86.7m last year, while those to the United Kingdom fell to $103m from $147.5m.

The biggest decline, of more than 50pc, was recorded in profit outflow to the UAE, which fell to $19.2m from $45m last year.

Published in Dawn, September 19th, 2026