ISLAMABAD: In a remarkable turnaround for its technology sector, Pakistan recorded IT exports of US$292 million in September 2024, reflecting a 42% year-on-year increase and marking the 12th consecutive month of growth. While this figure represents a 2% decrease from August 2024, it surpasses the 12-month average of US$280 million, showcasing sustained momentum in the industry.
According to Topline Pakistan Research, for the first quarter of FY25, total IT exports reached US$877 million, up 34% year-on-year. The significant growth in exports is attributed to several factors, including an expanding global client base, particularly in the Gulf Cooperation Council (GCC) region, and a recent policy change by the State Bank of Pakistan, which raised the permissible retention limit in Exporters’ Specialized Foreign Currency Accounts from 35% to 50%. This adjustment has encouraged IT companies to repatriate a larger share of their profits back to Pakistan.
Despite the month-on-month decline, analysts point to a shorter working month in September, with 20 working days compared to 21 in August, resulting in export proceeds of US$14.6 million per day in September, slightly up from US$14.2 million in August.
Pakistani IT firms are actively seeking global partnerships, participating in prominent events such as London Tech Week 2024 and Collision Canada 2024. A survey by the Pakistan Software Houses Association (P@SHA) indicates that 62% of IT companies are utilizing specialized foreign currency accounts, further facilitating international transactions.
A noteworthy development this fiscal year is the introduction of a new category by the SBP for Equity Investment Abroad (EIA), allowing export-oriented IT companies to invest up to 50% of their proceeds from specialized foreign currency accounts into foreign entities. This initiative is expected to bolster confidence among IT exporters, encouraging more remittances back to Pakistan.
Net IT exports for September 2024 stood at US$255 million, marking a 56% year-on-year increase and exceeding the 12-month average of US$245 million.
Looking ahead, industry experts project continued growth in the IT sector, with expectations of a 10-15% increase for FY25, potentially reaching US$3.5-3.7 billion. Among the companies leading this growth, Systems Limited (SYS) is highlighted as a preferred investment choice, trading at a projected PE of 14x for 2024 and 10x for 2025.
