Pakistan’s information technology sector witnessed a remarkable surge as IT exports surged by 37% year-on-year (YoY) and 19% month-on-month (MoM) to an unprecedented $306 million in March 2024.
This achievement marks the highest-ever exports in a single month, surpassing the previous record of $303 million set in December 2023. The robust performance in March also exceeded the 12-month average of $238 million, showcasing the sector’s steady growth trajectory.
The surge in IT exports is attributed to several factors, including a relaxation in the permissible retention limit by the State Bank of Pakistan (SBP).
The SBP’s decision to increase the retention limit from 35% to 50% in the Exporters’ Specialized Foreign Currency Accounts provided a boost to IT companies, encouraging them to repatriate foreign income and deposit it in local accounts, according to Topline Pakistan Research. Additionally, a stable local currency further incentivized exporters to capitalize on favorable exchange rates.
During the first nine months (July-March) of the ongoing fiscal year, IT exports totaled $2.28 billion, reflecting a 17% YoY increase compared to the same period in the previous fiscal year.
Net IT exports, which factor in both exports and imports, also witnessed a substantial uptick, reaching $275 million in March 2024, marking a 37% YoY increase and a 20% MoM increase. The net IT exports in March surpassed the 12-month average of $208 million, highlighting the sector’s contribution to the country’s trade balance.
In a recent interview, Finance Minister Muhammad Aurangzeb expressed optimism about the sector’s growth prospects, projecting IT exports to reach $3.5 billion by the end of the fiscal year.
Meanwhile, Muhammad Zohaib Khan, chairman of the Pakistan Software Houses Association (P@SHA), hailed the unprecedented achievement, noting that the IT industry had become the second-largest exporter in Pakistan, trailing only the textile sector.
Zohaib Khan emphasized the importance of policy continuity and urged government authorities to prioritize initiatives aimed at skills development and global branding of the IT sector to enhance the country’s soft image on the international stage.
“Crossing $300 million in a single month makes the IT industry second to only textiles in Pakistan,” Khan, the P@SHA chairman, said in a statement. “IT exports for the month of March 2024 is also the highest exports of the industry in a single month in the country’s history.”
Khan said this achievement was a result of hard work of all stakeholders and government policies. “All we need is policy continuity coupled with new initiatives vis-a-vis skills development and branding of the IT sector on a global-scale for the country’s soft-image,” he said, urging the country’s finance and revenue authorities to give due consideration and incorporation to their budgetary proposals that had already been submitted at concerned forums.
“We should aim for $5 billion for the forthcoming fiscal year, i.e. FY25,” he added. The information technology (IT) industry will fully support the initiatives of the Ministry of IT and Telecom (MoITT) in achieving the export target of $3.5 billion for the outgoing fiscal year 2023-24.
Looking ahead, Khan called for ambitious targets, suggesting that the IT industry should aim for $5 billion in exports in the forthcoming fiscal year, FY25.
The stellar performance of Pakistan’s IT exports in March 2024 underscores the sector’s resilience and potential to emerge as a key driver of economic growth and innovation in the country.