KARACHI: The repatriation of profit and dividend registered a decline of 55 per cent, owing to improved business climate for foreign investors in Pakistan.
The repatriation of profit and dividend stood at $159.2 million in July 2021, compared with $354.5 million in the same month of the last year, according to the statistics released by the State Bank of Pakistan (SBP) on Thursday.
The fall in repatriation of profit and dividend in July 2021, despite strong corporate earnings for the period ended June 30, 2021, is reflection of the foreign investors’ confidence in the domestic business climate.
The Overseas Investors Chamber of Commerce and Industry (OICCI), which is the representative body of foreign investors and multinationals operating in Pakistan, recently released a business confidence survey up to July 2021.
The Business Confidence Score (BCS) in Pakistan now stands at a positive score of 9 per cent, a record improvement of 59 per cent from the previous negative 50 per cent in Wave 19 Survey conducted in May 2020.
A positive BCI was last seen during the Wave 16 conducted in April 2018.
The confidence of the business community across Pakistan is shifting over from negative territory in the last survey to the positive territory and is driven by all the three segments, manufacturing, services, as well as the retail/wholesale sectors, with the first two recording an increase of 65 per cent each, (manufacturing from -48 per cent to positive 17 per cent and services from -59 per cent to positive 6 per cent), while the retail/wholesale sector went up 44 per cent (from -44 per cent to zero).
As the lockdown restrictions have been lifted, many of the manufacturing concerns have gone back to their 100 per cent capacity of production and are able to sell their product even during the lockdowns, which positively impacts all the business sectors.
Retailers and wholesalers were largely affected by the Covid–19 restrictions, as their business hours were cut short, resulting in income, cash flow and other issues.
This segment also believes that the next six months will fare better with more sales, profits, and a better situation for Pakistan.
The OICCI is the collective voice of major foreign investors in Pakistan. The over 200 OICCI members, from 35 different countries, have a presence in 14 sectors of the economy and contribute over one-third of Pakistan’s total tax revenue, besides facilitating transfer of technology and skills and providing employment to a sizeable number of people.