Pakistan’s information technology (IT) sector marked a milestone in April 2024, with exports surging 62% year-on-year (YoY) to an impressive $310 million.
This growth was driven by an increasing global demand for Pakistani IT services and strategic policy changes by the country’s central bank.
In addition to the remarkable YoY growth, the monthly IT exports saw a modest 1% increase from March, which had previously set the record at $306 million. “This is the highest ever export figure for a single month, surpassing the previous record of $306 million set in March 2024,” noted Topline Securities in a report. The April exports also significantly exceeded the 12-month average of $245 million.
Topline Securities attributed the substantial YoY increase to three main factors: the expansion of IT export companies in Gulf countries, especially Saudi Arabia; the relative stability of the Pakistani rupee; and the central bank’s decision to increase the retention limit in Exporters’ Specialized Foreign Currency Accounts from 35% to 50%.
A local media report highlighted that net IT exports in April 2024 exceeded $275 million, representing a 68% YoY increase and surpassing the 12-month average of $214 million. This net figure underscores the robust performance of Pakistan’s IT sector amid a challenging global economic environment.
Over the first ten months of the fiscal year 2024, net IT exports rose by 20% YoY to $2.28 billion, with total exports reaching $2.59 billion. This represented a 21% increase compared to the $2.14 billion recorded in the same period of the previous fiscal year. The growth trajectory reflects the sector’s resilience and its increasing contribution to the national economy.
The decision to raise the retention facility to 50% was introduced by Pakistan’s caretaker government. The then caretaker IT minister had predicted that this measure would boost IT exports by $1.0 billion, adding to the $2.6 billion recorded in FY23. However, despite the impressive growth, the brokerage indicated that the ambitious target of $3.5-3.6 billion for FY24 is unlikely to be met, with IT exports expected to close between $3.1-3.2 billion.
The surge in IT exports showcases Pakistan’s growing prowess in the global tech landscape and highlights the potential for further growth. As IT companies expand their footprint in the Gulf region and other international markets, and with continued support from government policies, the sector is poised to maintain its upward trajectory, contributing significantly to Pakistan’s economic development.
