During the first nine months of the current fiscal year, repatriation of dollars by foreign companies decreased 81.6 percent, mirroring low profits and the ongoing dollar shortage since the previous year.

State Bank of Pakistan (SBP) records show that the government’s strategy of restricting dollar outflows had a substantial impact on foreign direct investment (FDI), which decreased by 83.1 percent to $194.5 million from $1.15 billion during July-March FY23.

When compared to the outflow of $1.26 billion during the same time in 9MFY22, which was a significant 81.6 percent higher, foreign corporations remitted $233 million in profits and dividends during 9MFY23.

Profit losses increased from $4.9 million in February to $7.7 million in March. SBP has been trying to control the lack of foreign currency by limiting imports, but this has led to a shortage of raw materials that is hindering industrial activity, especially in sectors that are export-oriented.

In the third quarter of FY23, profit payments on FDI were $194.5 million as opposed to $1,152.3 million in FY22. Profits from foreign portfolio investments (FPI) decreased from $115.3 million to $38.6 million in 9MFY23.

The largest outflow was from mining and quarrying, which totaled $124.9 million for the nine months, compared to $132.2 million during the same time previous year.

Manufacturing sector profit outflows decreased from $403 million in the same time of last year to $29.3 million in 9MFY23.

Despite the bad economy, the financial and insurance sector is still profitable, and this year’s outflow from that sector decreased to $18.4 million from $188.5 million in 9MFY22.

In 9MFY23, the sectors of electricity, gas, steam and air conditioning generated outflows of $35.4 million as opposed to $179.8 million during the same time last year.

While this was happening, profit outflows from the information and communication sector decreased from $71.2 million to $9.8 million.