In November, Pakistan’s information technology (IT) exports experienced a notable 9% month-on-month surge, reaching $259 million, marking the highest level in the past 12 months. This increase is attributed to the State Bank of Pakistan’s (SBP) decision to relax the permissible retention limit for IT exporters, allowing them to retain 50% of their foreign earnings in specialized accounts, up from the previous limit of 35%. The stability of the rupee further encouraged IT companies to repatriate their foreign income and deposit it in local accounts.
Caretaker IT Minister Umar Saif highlighted that IT companies had potentially parked $1-2 billion outside of Pakistan, and repatriating these funds could significantly contribute to boosting the country’s foreign exchange reserves. The IT export figure represents the remitted amount back to Pakistan by technology companies engaged in various services, including software development, web design, data processing, and call centers for clients globally.
Notably, computer services constituted 83% of the total IT exports in November 2023, experiencing a 14% month-on-month and 20% year-on-year growth. On the other hand, telecom services, comprising 17%, saw an 11% month-on-month decline. Among other computer services, consulting, training, and maintenance recorded the highest growth rate, surging by 28% month-on-month, followed by a 14% month-on-month increase in computer software exports.
In the first five months of the fiscal year 2023-24 (July-November), IT exports increased by 6% year-on-year, reaching $1.2 billion, constituting 7.4% of the country’s total exports. Net IT exports, which deduct IT imports from IT exports, also saw an 11% month-on-month and 7% year-on-year increase to $226 million in November 2023. On a trailing 12-month basis, net IT exports reached $2.4 billion, marking a 10% year-on-year growth.
Looking ahead, the IT sector is anticipated to benefit from global and regional trends indicating increased spending on software and IT services. A report by Gartner, a technology research and consulting firm, projects a 13.8% growth in worldwide spending on software and a 10.4% increase in spending on IT services in 2024. In the MENA region, software spending is forecasted to grow by 12.3%, accompanied by an 11.1% increase in IT services spending, facilitating digitalization and automation in the region.
