Pakistan’s Information Technology (IT) exports recorded a growth of 9% month-on-month (MoM) in November 2023, reaching US$259 million. This is also 11% higher than the same month last year and above the last 12-month average of $222 million.
On a year-on-year (YoY) basis, IT exports for November 2023 also rose by 11% YoY to $259 million, due to a 20% YoY increase in the export of computer services. In the first five months of the fiscal year 2023-24 (5MFY24), IT exports have increased by 6% YoY to clock in at $1.2 billion.
According to a report by Topline Pakistan Research, the main driver of this growth was the relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), which increased it from 35% to 50% in the Exporters’ Specialized Foreign Currency Accounts, and the stable local currency, which encouraged IT companies to repatriate their foreign income and deposit it in local accounts.
The reported IT export number indicates the amount remitted back to Pakistan by technology companies. As per the IT Minister, IT companies have parked an estimated $1-2 billion outside of Pakistan, which could be brought back if the government provides more incentives and facilities for the sector.
Segment-wise, computer services showed the highest growth of 14% MoM, followed by information services with 3% MoM, while telecom services declined by 11% MoM. Among computer services, other computer services and exports of computer software increased by 28% MoM and 14% MoM respectively.
Net IT Exports (Exports-Imports) for November 2023 reported an increase of 11% MoM and 7% YoY to $226 million.
In 5MFY24, Net IT Exports recorded a growth of 6% YoY to $988 million. Net IT Exports on trailing twelve months (TTM) basis as of November 2023 also have increased by 10% YoY to $2.4 billion.
In 5MFY24, gross IT exports as a percentage of total exports was reported at 7.4%, compared to 7.3% in 5MFY23. Telecom services/computer services export mix for November 2023 was recorded at 17%/83% respectively, compared to 24%/76% mix in November 2022. In 5MFY24, Telecom Services/Computer services export mix was recorded at 19%/81%, compared to 20%/80% in 5MFY23.
According to Gartner Inc., a Technology Research and Consulting firm, worldwide spending on software is expected to grow at 13.8% and spending on IT services is expected to increase by 10.4% in 2024. MENA software spending is expected to record double-digit growth of 12.3% in 2024, followed by IT services spending growing at 11.1% next year, to accelerate digitalization and increasing automation, as per Gartner.
