IT and IT-enabled Services (ITeS) export remittances witnessed a substantial surge, marking a notable 39 percent increase year-on-year in January 2024, compared to figures from the corresponding period in the previous year, soaring past the $190 million mark.
Attributed to the recent relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), which elevated it from 35 percent to 50 percent in the Exporters’ Specialized Foreign Currency Accounts, coupled with the stability of the PKR currency, the uptick in exports found its impetus. This conducive environment encouraged IT companies to repatriate their foreign earnings, directing them towards local accounts, as per insights shared by Topline Securities.
Throughout the initial seven months (July-January) of the ongoing fiscal year 2023-24, the sector’s export remittances observed a commendable uptick of around 12.7 percent, settling at $1.720 billion, in contrast to $1.525 billion registered during the analogous period in the preceding fiscal year.
However, scrutinizing the month-on-month (MoM) performance, official data unveiled a slight setback as ITeS exports’ remittances experienced a decline of approximately 12.6 percent in January 2024, maintaining a figure of $265 million, in contrast to the preceding month’s $303 million.
Delving into broader perspectives, the realm of ICT export remittances, encompassing telecommunication, computer, and information services, exhibited a slight downturn, standing at $2.597 billion for the fiscal year 2022-23, marking a negative growth rate of about one percent in comparison to the preceding fiscal year’s $2.619 billion.
In a bid to foster the exponential growth of Pakistan’s IT exports, the Caretaker Federal Minister for Information Technology and Telecommunications, Dr. Umar Saif, unveiled the inaugural IT and ITeS export strategy, with aspirations to catapult the nation’s IT exports to a substantial $10 billion within the forthcoming three years, with even loftier ambitions pegged at $12-15 billion.
Nevertheless, despite the remarkable strides, numerous bottlenecks continue to impede the growth trajectory of IT and ITeS exports. Persistent challenges include policy inconsistencies, taxation intricacies, and banking impediments, which collectively stymie the sector’s potential to achieve a projected export value of $15 billion.
Official documentation divulges a staggering 178 percent upward surge in IT & ITeS exports over the past half-decade, demonstrating a robust compound annual growth rate (CAGR) of 30 percent, surpassing the growth rates witnessed in other local service industries, even outstripping the textile sector’s notable 148 percent growth. However, the prevailing constraints underscore the imperative need for concerted efforts to mitigate hurdles and foster sustained growth in the IT export landscape.
