KARACHI: Outflows of profits and dividends from Pakistan have increased by 21 per cent year-on-year to $1.19 billion in the first 10 months (July-April) of FY15.
The figure was a record 44pc higher than foreign direct investment (FDI) inflows of $825 million during the period, according to a latest report of the State Bank.
During the same period a year ago, the outflows were higher by $87m compared to FDI of $897m.
Against the backdrop of increasing remittances from overseas Pakistanis, which could be around $17bn at the end of this fiscal year, the value of reverse remittances is not significant. However, poor FDI is a cause of concern for the government.
Moreover, experts believe that the rising outflows would be a serious problem for the country once inflows from the International Monetary Fund and other donors stop.
The highest outflows were noted from the financial business (banks and others) which paid $295.4m profits and dividends during the 10 months, while FDI in this sector was $98m.
The telecommunication sector, which has shown a tremendous growth over the past decade, paid $159m compared to the inflows of $132m during July-April FY15.
Outflows from the power sector, particularly from thermal power, were $109.7m while FDI was $41.7m. The investment in hydropower is significant as it received $76.5m during this period. The hydropower sector has remained unattractive for the last several years.
The most attractive sector for FDI was oil and gas exploration as it received $216m, while the sector paid $108.5m as profits during the period under review. The sector received $424m FDI during the same period last year.
The food sector showed a negative investment while outflows rose to $76.5m. A year earlier, the sector received $79m as FDI and outflows were $57m.
FDI into the petroleum refining sector continued to be lacklustre at $6m compared to $2m a year ago. However, the outflows from this sector remained high, at $64m versus last year’s $68m.