IT Exports Up By 39% in October 2024

Pakistan recorded monthly IT exports of US$ 330 million, up by 39 percent YoY and by 13 percent MoM in October 2024. These monthly IT exports in October 2024 are higher than the last 12-month average of US$ 287 million. This is the 13th consecutive month of YoY IT export growth, starting from October 2023. This takes 4MFY25 IT exports to ~US$ 1.21 billion, up by 35 percent YoY. According to Topline Securities, the YoY jump in IT exports is due to (1) IT export companies growing client base globally, especially in the GCC region, (2) relaxation in the permissible retention limit by the State Bank of Pakistan, increasing it from 35 percent to 50 percent in the Exporters’ Specialized Foreign Currency Accounts, and (3) stability in PKR encouraging IT exporters to bring higher portion of profits back to Pakistan. MoM increase in IT exports is due to a higher number of working days in October (23) compared to September (20). Export proceeds per day were recorded at US$ 14.3 million for October 24 vs. US$ 14.6 million in September 24. Pakistani IT companies are active in engaging with global clients. Recently leading IT companies in Pakistan attended Oslo Innovation Week 2024, and the Pak-US Tech Investment Conference. According to a Pakistan Software Houses Association (P@SHA) survey, 62 percent of IT companies are maintaining specialized foreign currency accounts. A major development in FY25 was SBP adding a new category of Equity Investment Abroad (EIA), specifically for export-oriented IT companies. IT exporters can now acquire interest (shareholding) in entities abroad utilizing up to 50 percent of proceeds from specialized foreign currency accounts. This development will further boost the confidence of IT exporters to remit proceeds back to Pakistan. Net IT Exports (Exports-Imports) displayed a monthly number of US$ 299 million and increased by 47 percent YoY in October 2024. This is the highest-ever monthly figure. These net IT export numbers in October 2024 are also higher than the last 12-month average of US$ 253 million. The IT sector will continue its growth trajectory and momentum with likely growth of 10-15 percent for FY25 to US$ 3.5-3.7 billion.