Pakistan’s IT Exports See 25% YoY Growth
Despite challenges like internet disruptions and firewall issues, Pakistan’s IT exports reached $324 million in November 2024, marking a 25% increase compared to the same month last year. However, there was a slight 2% decline in exports compared to October 2024.
Consecutive Growth in IT Exports
This marks the 14th consecutive month of year-on-year growth in IT exports, starting from October 2023. November’s exports exceeded the 12-month average of $295 million, signaling a robust performance in the IT sector.
IT Exports Rise by 33% in 5MFY25
According to a report by Topline Securities, Pakistan’s exports during the first five months of FY25 grew by 33%, reaching $1.53 billion. This growth is attributed to several factors, including an expanding client base for IT companies globally, especially in the GCC region, and the relaxation of retention limits by the State Bank of Pakistan (SBP).
Key Factors Driving IT Export Growth
The increase in IT exports is also linked to the SBP’s decision to raise the permissible retention limit for exporters’ foreign currency accounts from 35% to 50%. This move, along with the stability of the Pakistani Rupee, has encouraged IT exporters to bring a larger portion of their profits back to the country.
MoM Decline Due to Fewer Working Days
The month-on-month decline in exports in November was mainly due to fewer working days—21 days in November compared to 23 days in October. However, per-day export proceeds were higher in November ($15.4 million) compared to October ($14.3 million).
IT Companies Expanding Globally
Topline Research noted that Pakistan’s IT companies are actively engaging with international clients, with recent participation in global events like the Oslo Innovation Week 2024 and the Pak-US Tech Investment Conference.
New SBP Initiative to Boost IT Exports
A significant development for FY25 was the SBP introducing a new category for Equity Investment Abroad (EIA) specifically for export-oriented IT companies. This initiative allows Information Technology exporters to acquire shares in foreign entities using up to 50% of the proceeds from specialized foreign currency accounts, further strengthening the confidence of IT exporters.
Conclusion
The growing IT exports are indicative of the sector’s increasing global footprint and the positive impact of supportive policies, including foreign currency account relaxation and SBP’s new investment initiatives.
