Pakistan’s IT Exports Hit $3.2 Billion in FY24

Pakistan’s IT exports have been on a remarkable upward trajectory, with total exports reaching an impressive $3.2 billion in fiscal year 2024 (FY24). This figure represents a significant 24 per cent year-on-year increase, showcasing the resilience and potential of the country’s IT sector. In August 2024 alone, the nation’s information and communication technology (ICT) exports, which encompass telecommunications and IT services, soared to $298 million. This surge indicates a 27 per cent increase compared to the same month last year and a 4 per cent rise month-on-month. Notably, this growth has surpassed the 12-month average of $275 million, underscoring the sector’s expansion despite facing various challenges, including internet disruptions and hurdles encountered by freelancers.

Several key factors are contributing to this impressive growth in IT exports. One significant driver is the expanding global clientele of Pakistani IT firms. While many local companies have traditionally focused on North America for their services, there has been a noticeable shift towards markets in the Middle East, North Africa, and parts of Europe. This diversification is crucial as it reduces dependency on a single market and opens up new avenues for revenue generation.

Pakistan’s IT Exports Hit $3.2 Billion in FY24

Another major factor bolstering the IT sector’s exports is the increase in the retention limit for foreign currency in exporters’ accounts. In FY24, this limit rose from 35 per cent to 50 per cent, allowing exporters to retain more of their earnings. This change has encouraged many IT firms to bring back a larger portion of their foreign currency revenue, resulting in a boost to overall export figures. A relatively stable Pakistani Rupee (PKR) has also played a role in encouraging exporters to reinvest in their businesses and expand their operations, further driving up export revenue.

Moreover, the heightened engagement of Pakistani companies in global events has significantly contributed to export growth. Participation in international trade fairs and conferences, particularly in key markets such as Saudi Arabia, London, and the United States, has allowed local firms to showcase their capabilities, network with potential clients, and secure contracts. This increased visibility on the global stage is helping Pakistani IT firms establish themselves as competitive players in the international market.

Looking ahead, the future of Pakistan’s IT exports appears promising. During the first two months of FY25 (2MFY25), ICT exports surpassed half a billion dollars, totalling $584 million. This figure represents a substantial 30 per cent year-on-year growth, further solidifying the IT sector’s position as a key driver of Pakistan’s economy. As a percentage of the country’s total services exports, IT exports now account for 48 per cent, a significant increase from 35 per cent during the same period last year.

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Market projections indicate that the IT sector will continue to thrive, with growth expectations ranging from 10 to 15 per cent in FY25. Analysts predict that total IT exports could reach between $3.5 billion and $3.7 billion by the end of the fiscal year. This optimistic outlook reflects not only the adaptability of local IT firms but also the ongoing investment in technology and innovation within the sector.

In conclusion, Pakistan’s IT export growth is a testament to the resilience and potential of its technology sector. With favourable government policies, a focus on diversifying markets, and increased global engagement, the future looks bright for the country’s IT industry.