Pakistan Witnesses Substantial IT Export Growth: A Catalyst for Economic Prosperity?

The information technology (IT) and IT-enabled services (ITeS) sector of Pakistan is showing remarkable progress. According to the official document, export remittances for computer and call center services grew by an impressive 28% in the first half of the fiscal year 2024-25. From July to December 2024, exports reached $1.864 billion, compared to $1.456 billion during the same period in the previous fiscal year.
Moreover, the data shows that IT export remittances saw a 15% year-on-year increase in December, standing at $348 million compared to $303 million in December 2023. On a month-on-month basis, exports registered 12% growth in December 2024, up from $310 million in November 2024.
The fiscal year 2023-24 marked a milestone for Pakistanโs IT sector, with exports hitting an all-time high of $3.223 billionโa 24% increase from $2.596 billion in 2022-23. The government has set an ambitious target to further boost IT exports to $4.2 billion by the end of the fiscal year 2025.
Despite this growth, challenges persist that must be addressed to gain the full potential of the IT sector. The sources suggest that a significant portion of IT export revenue remains unremitted. Pakistan is home to 2.32 million freelancers, contributing 15% to IT exports. However, only 38,000 freelancers hold bank accounts, representing a huge gap. Although the State Bank of Pakistan (SBP) reports that 500 new accounts are being opened weekly, retaining these account holders and encouraging others to formalize their earnings remains important.
To address these issues, the SBP has raised the foreign exchange retention limit for IT exporters and freelancers to 50% or USD 5,000 per month (whichever is higher). This policy aims to incentivize the sector to remit earnings to Pakistan. Additionally, banks have been directed to simplify account opening procedures for freelancers and IT companies, including options for PKR and foreign currency accounts.
Our Opinion
The growth in IT exports is a promising sign for Pakistanโs economy, reflecting the sectorโs resilience and potential. However, achieving the ambitious $4.2 billion target will require more than policy adjustments. Investment in infrastructure, skill development, and a focus on digital literacy are essential to maintain this momentum. In addition, encouraging freelancers to formalize their operations and ensuring ease of doing business for IT companies are critical steps to sustain long-term growth. Without addressing these structural challenges, the sector may struggle to achieve its full potential.
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