IT exports break records
Global slowdown in IT investment and continued devaluation of the rupee have caused a considerable decline in Pakistan’s IT exports. photo: file
The IT sector continued its upward trajectory, marking another all-time high record of $310 million in inflows. This stands as the highest export figure ever recorded in a single month, surpassing the previous peak of $306 million in March 2024.
Data released by the State Bank of Pakistan (SBP) reveals a remarkable 62% year-on-year increase and a 1% rise from the previous month in export receipts. April 2024 witnessed IT exports surpassing the last 12-month average of $245 million.
Topline Securities reports that IT export companies are thriving in the GCC region, particularly in Saudi Arabia. Factors such as the relaxation of permissible retention limits by the SBP, increasing it from 35% to 50% in the Exporters’ Specialised Foreign Currency Accounts, and rupee stability are encouraging IT exporters to repatriate a higher portion of profits back to Pakistan.
Umair Nizam, Member of the IT Committee at the Federation of Chamber of Commerce and Industries (FPCCI), highlighted the sector’s potential for sustained growth in the coming months, thanks to support from all stakeholders. He predicts further export growth and potential investment inflows through partnerships and joint ventures between local and foreign companies.
By the end of the first 10 months (July-April) of the current financial year 2023-24, the IT sector achieved a historic high of $2.59 billion, marking a 21% year-on-year increase compared to the same period last year’s $2.14 billion.
Tufail Ahmed Khan, President and CEO of the Pakistan Freelancers Association (PAFLA), highlighted the significant contribution of freelancers to the IT sector’s export growth, both through remote work for foreign companies and engagement on freelancing platforms.
CEO of Hexalyze, Syed Saad Shah, underscores the untapped potential of Pakistan’s IT exports, as global companies increasingly seek services from Pakistani firms, particularly in Europe. Shah commended the government’s role in facilitating the sector to maximise export benefits and urged it to continue focusing on the IT sector. However, achieving the FY24 target of $3.5-3.6 billion seems unlikely, with IT exports expected to close in the range of $3.1-3.2 billion, he said.
Meanwhile, SBP data indicates that net IT exports (exports excluding imports) hit a record high of $283 million in April 2024, reflecting a 68% year-on-year increase.
Published in The Express Tribune, May 18th, 2024.
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