Pakistan’s Information Technology (IT) sector has recorded impressive growth, with IT exports reaching US$ 330 millionin October 2024. This marks a 39% year-on-year (YoY) increase and a 13% month-on-month (MoM) rise compared to September 2024. These figures exceed the 12-month average of US$ 287 million, continuing the upward trend for the 13th consecutive month of YoY growth since October 2023.
The 4-month cumulative total (4MFY25) for IT exports now stands at approximately US$ 1.21 billion, reflecting a 35% YoY increase, underscoring the sector’s strong and sustained growth trajectory.
Factors Driving Growth in IT Exports
Several key factors have contributed to the remarkable surge in IT exports. Pakistani IT companies are increasingly tapping into international markets, with a particular focus on the Gulf Cooperation Council (GCC) region, which has become a significant source of business.
Pakistani IT companies have been active in forging global partnerships, attending high-profile events such as the Oslo Innovation Week 2024 and the Pak-US Tech Investment Conference. These international engagements have helped raise the profile of Pakistan’s IT sector on the global stage.
Recent policy adjustments by the State Bank of Pakistan have had a positive impact. The relaxation of the permissible retention limit in Exporters’ Specialized Foreign Currency Accounts (from 35% to 50%) has encouraged IT exporters to retain a larger portion of their earnings in foreign currency accounts. Under the Equity Investment Abroad (EIA) category for export-oriented IT companies, SBP has provided a further boost to the sector. This allows IT exporters to invest up to 50% of their export proceeds in foreign entities, encouraging more remittances back to Pakistan and fostering confidence among IT exporters.
The month-on-month (MoM) growth in October 2024 was partly driven by the increased number of working days—23 days in October compared to 20 days in September. The daily export proceeds for October were recorded at US$ 14.3 million, slightly down from US$ 14.6 million in September.
According to a recent survey by the Pakistan Software Houses Association (P@SHA), 62% of IT companies are actively maintaining specialized foreign currency accounts, indicating growing adoption of these beneficial policies.
In October 2024, Net IT Exports (calculated as exports minus imports) reached US$ 299 million, a 47% YoY increase and the highest-ever monthly figure. This performance also surpassed the 12-month average of US$ 253 million, further reflecting the sector’s accelerating growth.
Outlook for FY25
The Pakistani IT sector is poised for continued growth, with experts forecasting an increase of 10-15% in total IT exports for FY25, potentially reaching between US$ 3.5 billion and US$ 3.7 billion. With strong international demand, favorable policy reforms, and a growing global footprint, the sector is set to maintain its upward momentum throughout the year.
This growth story reinforces the importance of the IT industry as a key driver of Pakistan’s economic future, highlighting its potential to make a significant contribution to national exports and create long-term value in the global digital economy.
