Pakistan’s IT sector has recorded its highest-ever monthly exports, reaching US$ 348 million in December 2024. This represents a 15% year-on-year (YoY) increase and a 12% month-on-month (MoM) growth, signaling a robust expansion of the nation’s IT export industry. The December performance significantly outpaced the 12-month average of US$ 299 million, marking a continued growth trajectory in Pakistan’s IT exports.
This milestone comes amid challenging conditions, including internet disruptions, which further highlight the resilience and adaptability of Pakistan’s IT companies. The achievement also signals the 15th consecutive month of YoY growth in IT exports, a trend that began in October 2023. For the first half of fiscal year 2025 (1HFY25), Pakistan’s total IT exports have reached US$ 1.86 billion, up by 28% compared to the same period last year.
An analysis of daily export proceeds shows that December 2024 saw an average of US$ 16.6 million per day, compared to US$ 14.8 million in November 2024. Several factors have contributed to this consistent growth, including the expansion of Pakistan’s IT export companies into new global markets, particularly in the Gulf Cooperation Council (GCC) region. In addition, several policy changes by the State Bank of Pakistan (SBP) have had a favorable impact on the sector. One such policy adjustment was the relaxation of the permissible retention limit for IT exporters, increasing it from 35% to 50% in Exporters’ Specialized Foreign Currency Accounts. This has provided exporters with additional liquidity and the flexibility to reinvest a larger portion of their earnings.
The introduction of a new category for Equity Investment Abroad (EIA) has also supported growth, allowing IT companies to use up to 50% of their foreign currency account proceeds to acquire equity in foreign entities. This policy development has bolstered the confidence of Pakistani exporters, encouraging them to remit a larger share of their profits back to Pakistan.
Pakistani IT companies are actively engaging with global clients. Leading firms have participated in major international events such as Oslo Innovation Week 2024 and the Pak-US Tech Investment Conference, further strengthening their global footprint. According to a recent survey by the Pakistan Software Houses Association (P@SHA), 62% of IT companies are now maintaining specialized foreign currency accounts, reflecting the sector’s growing reliance on these financial instruments.
Despite the positive growth in gross exports, net IT exports (exports minus imports) showed a slight decline in December 2024. Net IT exports stood at US$ 222 million, a 16% decrease compared to December 2023, and lower than the 12-month average of US$ 265 million. This decrease is attributed to an increase in the import of IT-related goods and services. However, the overall increase in gross exports has more than compensated for the dip in net exports.
Looking ahead, the outlook for Pakistan’s IT sector remains positive, with growth projections of 10-15% for FY25, reaching between US$ 3.5-3.7 billion. The government’s “Uraan Pakistan” economic plan has set an ambitious target of US$ 10 billion in IT exports by FY29, with a compound annual growth rate (CAGR) of 28% needed to meet this goal.
In the current market, Systems Limited (SYS) is among the leading companies in the IT sector. According to Topline Securities, SYS remains a preferred pick, with a projected price-to-earnings (PE) ratio of 15.3x for 2024 and 11.4x for 2025.
Pakistan’s IT export sector continues to show strong growth, and the December 2024 figures exemplify the sector’s resilience and potential. With ongoing policy support and international engagement, the industry is poised for continued expansion, contributing significantly to the country’s economic growth in the coming years.
