By Syed Wahaj Ahmed
Pakistan recorded monthly Information Technology (IT)’s exports of $265 million, up 39% Year-over-year (YoY) while down 13% MoM in Jan-2024. IT exports in Jan 2024 are higher than last 12-month average of $227 million.
YoY jump in IT exports is due to the few reasons; firstly, relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), increasing it from 35% to 50% in the Exporters’ Specialized Foreign Currency Accounts, and lastly, stable local currency which encouraged IT companies to repatriate their foreign income and deposit it in local accounts.
To highlight, the reported IT export number indicates the amount remitted back to Pakistan by technology companies. As per the IT Minister, IT companies have deposited an estimated $1-2 billion outside of Pakistan.
In 7MFY24 IT exports clocked in at $1.7 billion, up 13% YoY compared to $1.5 billion recorded in 7MFY23.
Net IT Exports (Exports-Imports) also recorded an increase of 35% YoY while down 9% MoM to $240 million in Jan-2024. These net IT exports numbers in Jan-2024 are also higher than last 12-month average of $199 million. In 7MFY24 net IT exports recorded a growth of 11% YoY to $1.5 billion.
Caretaker Federal IT Minister Dr Umar Saif has stated that the caretaker government has successfully achieved 13 out of the 15 goals set to promote the IT sector and increase its exports within a brief period of the caretaker setup. Major goals achieved include allowing the retention of 50% in dollars, the establishment of Specialized Tribunals, enabling PayPal Remittances, ensuring 5G Spectrum availability, and establishing a startup fund, among others.
Although there has been a growth in gross IT exports during 7MFY24, the government’s ambitious target of reaching $5 billion seems challenging. We anticipate that gross IT exports for FY24 will likely fall within the range of US$3-4bn compared to $2.6 billion recorded last year.
