IT exports surge 42pc in September, reach $292m

LAHORE: Pakistan’s IT exports recorded impressive growth, reaching $292 million in September 2024, up 42 per cent compared to the same month last year. This figure also surpassed the 12-month average of $280 million, marking the 12th consecutive month of year-on-year (YoY) growth since October 2023.

According to the State Bank of Pakistan (SBP), IT exports in the first quarter of FY25 surged by 34 per cent year-on-year, reaching $877 million. The growth in IT exports is attributed to several factors, including exporters expanding their global client base -- particularly in the GCC region -- an increase in the permissible retention limit by the SBP (from 35 per cent to 50 per cent) in exporters’ specialized foreign currency accounts, and the stability of the Pakistani rupee, which has encouraged exporters to repatriate a higher portion of their profits to Pakistan.

Pakistani IT companies have been actively engaging with international clients, with leading firms participating in high-profile events such as London Tech Week 2024, Collision Canada 2024, and Black Hat USA. A survey by the Pakistan Software Houses Association (P@SHA) revealed that 62 per cent of IT companies are utilizing specialized foreign currency accounts.

A key development in FY25 was the SBP’s introduction of a new category, equity investment abroad (EIA), specifically for export-oriented IT companies. This allows IT exporters to acquire shares in foreign entities using up to 50 per cent of the proceeds from their specialized foreign currency accounts. This initiative is expected to further boost the confidence of IT exporters to repatriate proceeds back to Pakistan.

Dr Noman Said, an IT exporter, noted that the growth in IT exports has been remarkable, despite challenges such as slow internet speeds, which continue to affect productivity. Nevertheless, these companies have made extraordinary efforts to bring foreign exchange into the country.

Dr Said anticipates that export values will rise to $300-350 million in the coming months, reflecting the combined efforts of the government and IT companies. He added that IT firms are optimistic about expanding their businesses through collaborations with both foreign and local partners in traditional and non-traditional markets.

The net IT exports (exports minus imports) stood at $255 million for September 2024, representing a 56 per cent year-on-year increase. This figure also exceeded the 12-month average of $245 million.It is projected that the IT sector will maintain its growth trajectory, with an estimated growth rate of 10-15 per cent for FY25, potentially bringing total IT exports to $3.5-3.7 billion.