Pakistan’s information technology (IT) sector is experiencing a remarkable boom, with exports surging by an impressive 37% year-on-year (YoY) to reach a record high of $306 million in March 2024.
Pakistan’s IT Exports: Breaking Records
This significant increase marks the highest monthly IT export figure ever recorded in Pakistan, surpassing the previous record of $303 million set in December 2023. Additionally, it surpasses the average monthly IT exports of $238 million observed over the past year.
Factors Behind the Surge of IT Exports
Several key factors are contributing to this positive trend. One crucial factor is the State Bank of Pakistan’s (SBP) decision to relax the permissible retention limit for Exporters’ Specialized Foreign Currency Accounts. This change, increasing the limit from 35% to 50%, provides greater financial flexibility for IT companies. Additionally, a stable local currency has encouraged IT firms to repatriate their foreign earnings and deposit them in Pakistani accounts, further boosting reported exports.
Pakistan’s IT Exports: A Year of Steady Growth
The robust performance in March extends a year-long trend of growth. During the first nine months (July-March) of the current fiscal year (9MFY24), IT exports reached a total of $2.28 billion, reflecting a 17% YoY increase compared to $1.94 billion in the corresponding period of the previous fiscal year.
Net Gains and Looking Ahead
The positive trend extends beyond gross exports. Net IT exports (exports minus imports) also saw a significant rise of 37% YoY, reaching $275 million in March 2024. This surpasses the 12-month average of $208 million and signifies a growing trade surplus in the IT sector. Similarly, net IT exports for 9MFY24 recorded a 16% YoY increase, reaching $1.99 billion.
While Finance Minister Muhammad Aurangzeb expressed optimism about achieving the ambitious target of $3.5 billion in IT exports for the entire fiscal year, analysts suggest a more realistic figure could be around $3.0 billion, still marking a significant year-on-year growth.
Pakistan’s IT sector is demonstrating remarkable resilience and growth potential. With continued supportive policies and a skilled workforce, the industry is poised to make a significant contribution to the country’s economic development.
